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Paolo Ardoino, CTO of Bitfinex & Tether – Interview Series

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Paolo Ardoino, CTO of Bitfinex & Tether - Interview Series

Paolo Ardoino is the CTO of Bitfinex & Tether.

Bitfinex is a digital asset trading platform offering state-of-the-art services for digital currency traders and global liquidity providers.

Tether is the most widely used stablecoin in the world. They recently launched Tether Gold.

You’re currently the CTO of two of the most successful blockchain companies in the cryptocurrency space, Bitfinex and Tether. How did you find yourself in such an enviable position?

I started in the Bitcoin crypto space between 2012- 2013, not too early, not too late. I was able to enjoy quite a few runs in the space. At the time I was working in the traditional financial sector in London. I had my own startup, and my expertise was in building highly scalable applications as a part of computing and distributed systems. Of course, finance and scalable applications and what the system sees is a perfect match for Bitcoin. So as soon as I started reading about Bitcoin, I fell in love.

I was experimenting and getting more and more excited about Bitcoin. And then at the end of 2014, I had the opportunity to join Bitfinex. They had a problem with the matching engine. Given my expertise, I offered my help to build the matching engine to be more scalable, so we were able to achieve 1,000 times the previous number of transactions per second.

Then, I started getting a little bored with my company in London which was mired in traditional finance. The old, outdated protocols were no longer interesting and I wanted to do something that was related to Bitcoin and the crypto space. I saw this as a huge opportunity to do something that would matter in the long run — to help change the financial system itself and leverage the groundbreaking technologies based on blockchain.

In mid-2016 I became CTO of Bitfinex and worked hard to bring the platform to what is today. The beautiful interface, carefully designed and really robust, the matching engine and APIs were all a priority, as well as making it all highly scalable. This is basically still my role today. Apart from managing my team, I keep working on the core of the platform. In 2017, I became the CTO of Tether. Tether is the biggest stablecoin by market capitalization. It’s really one of the most amazing ideas in this sector. Everyone today talks about Tether, but it was really created by a group of visionaries and Bitcoin lovers in 2014. They had this great idea to solve the problem of arbitrage, especially efficient arbitrage across crypto exchanges. The arbitrage opportunities were really big, but the problem is that to exploit those, you have to move wires around different exchanges. It was really painful and really slow — it could take days! Tether was the solution for that and worked out beautifully.

 

Tether Gold is a token (XAU₮) that is pegged to physical gold. Where is this physical gold located and what’s the redemption process should an investor choose to redeem their tokens?

The physical gold is located in Switzerland and for security reasons I cannot give the exact location. In order to redeem Tether Gold, a holder must have enough tokens for a full bar of gold. In order to start the redemption process we normally ask that a customer have at least 430 Tether Gold tokens. We do that because 400 ounce gold bars aren’t actually 400 fine troy ounces — they vary in size from as small as 385 fine troy ounces and as big as 430 fine troy ounces.

When a holder wishes to redeem, we run an algorithm that “consolidates” their Tether Gold tokens onto one or more full gold bars. Those bars are then made available to the token holder for pick-up at the location of their choosing in Switzerland.  From there, they can bring the gold wherever they want, according to travel rules and transport mechanisms and various rules of Switzerland and their jurisdiction. Alternatively, the token holder can ask us to try to sell their gold bar to a purchaser in Switzerland. If we’re able to sell it, the token holder will get the proceeds from that sale, less our fees, instead of the physical gold bar.

 

Why do you believe that gold stablecoins are necessary for investors?

We are seeing a period of uncertainty in the market. Thus, gold represents an interesting alternative to fiat cash. When there’s a lot of uncertainty in the financial markets, usually hedge  funds go to cash, so they sell their assets and they try to minimize the volatility. They usually use cash for that, but gold is representing a sort of middle ground between keeping the investment in full — let’s say equities, stocks, cryptocurrency, whatever — that are super volatile and something that feels more volatile than cash of course that is more novel. Gold is this middle ground, and is also one of the assets we see becoming more active when there is geopolitical uncertainty.

 

Tether Gold recently surged to a $21 million market capitalization. Do you believe this is based on coronavirus fears? What else is driving this surge in interest?

It reached $21 million, but for me this is just a start. I believe that in the next few months we’ll see additional growth. As I said, gold is not just a really useful hedging mechanism for traders. Gold is a good way to hedge part of the risk when you have your assets under management. Tether Gold is a good way to hold gold because you are not charged annual fees based on your holdings of Tether Gold. I believe that the $21 million Tether Gold is still a small amount. Our vision is that Tether Gold will become a preferred way to hold gold. As gold is used as a hedging mechanism for large funds, we expect Tether Gold will continue to grow in popularity. There will be the need of much more Tether Gold as a result. So we should see more and more users acquire Tether Gold.

 

Can you share with us the current plans of integrating Tether (USDT) on the lightning network?

Bitfinex and Tether are funding a project called RGB Spectrum that is meant to develop a protocol to issue digital assets on top of the Lightning network. I believe that the moment the protocol is live, stable, and well-tested Tether will be one of the first to utilize this new protocol. That’s because Bitfinex and Tether believe that Bitcoin and Lightning network are really important technologies and the network is really scalable, purely peer-to-peer. It’s as decentralized a protocol for micropayments as it should be. The RGB protocol will be ready to launch Tether on top of it because that will complete our vision of having Tether enable peer-to-peer micropayments.

 

Over the past year we have seen many new USD stablecoins. Why should investors continue to use Tether over some of these new options?

I believe that the reason is that Tether has some first mover advantage. It started in 2014, and the first big competitor started in 2018. Tether had four years of technological advancement and business advantage. One of the key qualities of a stablecoin should be cross-chain interoperability. Our major competitors are working mainly on Ethereum, while for us it is important to try and to serve as many communities as possible. Ethereum has a big community, EOS has a big community. Other blockchains that we support like Algorand, and Liquid, and Tron have big communities, so realize that for a stablecoin to be complete and to be really useful it needs to be the common ground of different blockchains. That is a huge advantage that we believe our competition hasn’t realized yet.

 

Bitfinex recently replaced IEOs with Bitfinex Token Sales which is digital assets offering and launch solution for high-quality crypto projects. Can you share with us what this platform is exactly, and why entrepreneurs should use it versus launching an IEO on Binance, KuCoin, or other competitors?

First of all, you can see that Bitfinex didn’t launch many IEOs. They didn’t launch many projects because we know that most of the projects that were launched had really bad performance. We don’t want to replicate the errors made by other platforms. We are more careful, and did an enormous amount of due diligence before deciding to launch a project through our Bitfinex token sales platform. I believe that our approach is more professional and more thorough. Projects that we’ll launch will be part of a really exclusive platform and will be fully considered as a high quality project just for the fact that we were able to complete our thorough evaluation process. We want to make sure that whatever we list is a quality project that respects the fair valuation, and has a high utility so that the Bitfinex customers that will be interested in participating in the offering will be protected. To achieve this, we’ll already have done a lot of due diligence for them.

 

What type of projects will be featured on this platform?

There’s a wide variety of projects. There are artificial intelligence-related projects. There are games. There are tokens that aim to bring banking to the unbanked in a poor region. There are new blockchains interested to get adoption and prove themselves through the process. It’s really a huge variety of projects.

 

Are there any new exciting projects in the pipeline at either Bitfinex or Tether that we should be aware of?

At Bitfinex, we are working on many new features that are really important for our customers. We are focusing on options when it comes to our derivatives platform. We are launching new integrations with third party providers in the near future around lending. And we are going to create an advanced version of our renowned peer-to-peer margin lending platform that has been powering our margin trading platform since 2013. So there are many projects that we are working on, plus launching additional pilot projects built on top of Lightning network to help market makers to try out how to improve their trading strategies, exploiting fast live network pay settlements.

 

Is there anything else that you would like to share about either Bitfinex or Tether?

As a general thought, Bitfinex is one of the key companies in the crypto space that for many years fought and allowed the industry that we’re all a part of to grow in a steady manner. Bitfinex shielded a lot of the problems to the crypto industry, especially being an on ramp to fiat and helping raise funds. Bitfinex built many interesting projects, a really solid trading platform that is home to a lot of traders. Experiment was the first to support the Lightning network, so basically Bitfinex is showing a lot of love to Bitcoin. We believe that Bitfinex is working for Bitcoin rather than using Bitcoin to just create profit.

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Antoine Tardif is the CEO of BlockVentures.com, and has invested in over 50 blockchain projects. He is also the founder of Bitcoinlightning.com a news website focusing on the lightning network, and a founding partner of Securities.io

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Benjamin Tsai, President & Managing Partner of Wave Financial – Interview Series

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Benjamin Tsai, President & Managing Partner of Wave Financial - Interview Series

Benjamin Tsai is the President & Managing Partner of Wave Financial. Wave Financial offers early-stage investment, asset management, and treasury management to further the growth of the crypto and digital asset ecosystem

What was it that initially attracted to becoming the President and Managing partner of Wave Financial, an early stage venture fund focused on crypto currency?

My experience is mainly in the finance space, both sell side with BofA Merrill Lynch for 12 years and buy side with AllianceBernstein for 3 years.  When I returned to Los Angeles, I started to get involved in blockchain technology and its various uses.  The most natural one was to apply it to finance, and that application was most interesting to me.  So when I met David Siemer, our CEO, we decided to put together Wave Financial, an asset management firm focused on blockchain/cryptocurrencies.

This platform allows me to explore the limits of the space, such as crypto derivatives.  We have recently launched the Wave BTC Income & Growth Fund, which is a fund that pays a target rate of 1.5% yield monthly by selling Bitcoin options in the market.  We believe this is an innovative product, first in the market, and should be attractive to both long time bitcoin holders and also new investors in crypto.

 

One of the index funds offered by Wave Financial is the ‘Select 20 Index’ which is a fund that rebalances itself monthly and provides exposure to the top 20 digital assets. How has this fund performed compared to a more activate trading fund approach?

Comparison between active and passive management is always difficult.  This is especially hard in the crypto world, where there is not any established benchmark.  We developed the Select 20 Index to serve as the crypto market benchmark that better reflects the market compared to just Bitcoin.  With the index as a baseline, we also have our fund which tracks the index.  Due to the low fees, we believe we are doing well to provide market beta to investors.

There are actively managed funds that may be doing better and worse, but they would have been taking higher risk compared to the market beta, and also have higher fees.  The outperforming ones would have been able to justify the higher risk and fees, but the underperforming ones obviously do not.  For an investor to determine which funds could outperform would be very difficult, as track records are very short, and the crypto market is still in its infancy.  It would be difficult to show how that alpha capture can be replicated going forward.

In summary, there will be funds that outperform and ones that underperform our index and/or fund.  But for clients to take a pure market beta, similar to an equity ETF, our product provides the exposure at a low cost, and is an effective tool for achieving that for the investors.

 

Wave Financial is clearly bullish with the future of digital securities having invested in both Securitize and Vertalo. What is it about this industry that has you most excited?

I believe the existing infrastructure for equity, fixed income, and various asset classes have all been building and improving on older systems which were silo-ed.  As investments themselves become more flexible, the traditional infrastructure is no longer efficiently supporting the new way of asset management.  For example, there use to be just bond investors and equity investors, then we had 60/40 target allocations, then the endowment model which included alternative investments of hedge funds, real estate, commodities, and more exotics assets, and so forth.  For the next generation of investors, access to these asset classes and being able to get int and out of these assets should become more simple and more available to a wider audience.  I believe digital assets can do that.

For example, we are currently working on a kentucky whiskey fund.  This fund will give accredited investors access to investing in whiskey, with the opportunity to trade the ownership on the blockchain in a private exchange.  This type of flexibility at a reasonable cost was simply not available before the advent of digital securities.

 

What are some of the issues that security tokens need to overcome to reach mainstream adoption?

I believe that the education and infrastructure are two things that are missing in the industry before we can have mainstream adoption.  On the education side, we need to get investors comfortable about tokenization as a technology applied to existing financial instruments that improves the efficiency of it.  The legacy ICO marketing issues and poorly thought out projects (along with frauds) certainly has given the concept a negative bias.  But education will overcome that with time.

The second part is infrastructure; we need to have well accepted stable infrastructure for doing security tokens.  This means issuance platforms (like Securitize and Vertalo) that have transfer agent license which allow them to track/change the ownership of the securities, qualified custodians (like Coinbase and Kingdom Trust) that can help clients hold the security tokens with peace of mind, and security token exchanges (like OpenFinance Network and tZero) that can provide a place for the tokens to be traded.

As an addendum to the infrastructure, we also need better user interface so clients can focus on the investment aspects of security tokens instead of worrying about what chain it’s on and other technical challenges that are not really relevant to their core investment thesis.  When I log into Schwab to trade, I don’t think about what OS I am running and what language the interface is programmed in to complete my trade.  Once done correctly, it would be very transparent and irrelevant for the users.

 

Out of all the different types of assets which can be tokenized such as real estate or art, what industry do you personally believe is best suited to tokenization?

Is this a trick question or a softball?  I think whiskey barrels are the best thing to focus on!

Seriously though, I think any asset that gives off a cashflow would be interesting.  We have looked at real estate, race horses, solar panels, and other ideas that can be done.  Whiskey was good not because the portfolio gives off cashflow, but because we can sell a few barrels to generate cash and also provide a mark-to-market for the investors.  This is hard to do with a single Picasso; it would be impossible for me to sell a fraction of it.

The real estate space is an interesting one.  I am personally a real estate investor in Southern California, so I keep a close eye on this.  In the US, deals have not generally been very successful due to the fact that the buyers of real estate are not really interested in the tokenization, and there are plenty of buyers to support the business without it.  I believe that the development in Asia will be different, as more people are looking at both real estate and blockchain technology.  The two combined should be attractive enough for Asian investors, and it should catch on better than here in the US.  I have spoken to a number of top tier financial institutions in Japan, and real estate is an area of focus for them as they look at tokenization.

 

Circling back to the Wave Kentucky Whiskey (WKW20) that you mentioned earlier. For investors who are not familiar with this, could you explain what this is and the benefits of investing in this asset class?

Although we started the discussion with tokenization of hard assets, Wave Financial are a California Registered Investment Advisor (most of us are FINRA registered) so we have fiduciary duty to our investors to provide good products.  We reviewed a number of different assets and decided to focus on whiskey because the return profile is very attractive.

We are able to source a barrel of Kentucky whiskey and store/insure it over 5 years for roughly $1000.  In 5 years, that barrel of whiskey is estimated to be worth $3000 to $5000 on a conservative estimate.  This is a 3x-5x return over 5 years, and the variability is very low.  Also, as this is a commodity, we are able to get insurance for our inventory, which covers the value of the losses if we dropped a barrel or if the warehouse burns to the ground.  (This has happened before, as the whiskey is over 50% alcohol!)  The downside risk is limited.  One last point I would bring up is that we have found whiskey to be very resilient in down markets.  From industry research, through the financial crisis, American whiskey had only 1 down year in 2009, and the drop was 1.4% by dollar and 0.7% by volume sales.  (This is not an anomaly, Scottish whiskey went up in value in 2009.)  All of this means that the whiskey is a very attractive investment asset class in general and especially in this market.

 

In early 2018, you Co-Founded and became the CFO of the LA Blockchain Lab. Could you share with us some details on what the LA Blockchain Lab is?

LA Blockchain Lab is a non-profit that was founded to connect academia and government in Southern California to promote the use of blockchains.  We count UCLA, USC, UC Irvine, and Caltech as founding schools and we work with the City and County of Los Angeles governments to education and disseminate information about the developments in this space.

 

What are some interesting projects that you have seen come out of the LA Blockchain Lab?

One of the roles we have taken is to provide consulting to large corporates as they explore the use of blockchain.  For example, we worked on a project for Lamborghini a while back that explored how they can use the technology.  It was fascinating as we presented to the board and had a lively discussion at Pebble Beach.  We also consulted with Panasonic and helped them host a seminar on Smart Cities, with the CTO of City of LA and USC professors presenting on technological advances to cities and what more can be done.  We plan on further seminars in entertainment, finance, healthcare, and other topics, although we are assessing the situation with the shelter-in-home order in place.

 

Is there anything else that you would like to share about Wave Financial?

We are very proud of the work we have done for the past few years in rolling out products and providing treasury management services for corporate and high net worth individuals.  We think this is the professional and the right way to do business, and we look forward to growing our business to serve more customers over time.

Thank you for this fantastic interview. For readers who wish to learn more visit Wave Financial.

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Adam Vaziri, CEO of Blockpass – Interview Series

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Adam Vaziri, CEO of Blockpass - Interview Series

Adam is the founder and CEO of Blockpass – a self sovereign identity application for regulated industries. Adam Vaziri’s background is as a blockchain lawyer and set up Diacle in 2013 to assist blockchain projects with compliance. He is a tireless blockchain entrepreneur and labelled a ‘bitcoin pioneer’ by Bitcoin Magazine.

Could you explain what Blockpass is and how the platform benefits investors?

Blockpass makes compliance for blockchain and other financial services easy and quick to adopt. It is the only KYC & AML verification SaaS that businesses can sign up to and in minutes conduct compliance checks on on-boarding customers. It is fully automated and hosted in the cloud, and requires no integration or setup cost. You can set up your account immediately and test the service for free. For investors and other individuals, Blockpass is a secure, user-centric gateway to financial services and other regulated offerings, allowing one click KYC submission.

 

You have a legal background; how did you transition from law to cryptocurrency?

I discovered bitcoin in 2012 and set up the first legal consultancy in London to specialise in bitcoin. My job was helping bitcoin companies get licenses and operate their business compliantly. A lot of the problems these startups were facing was how to comply but not spend too much on lawyers and consultants.

When I saw that compliance was expensive, I thought it was unfair that only large businesses could afford to comply. Smaller businesses are faced with a lot of compliance responsibilities and that just adds to their costs. It means to be a successful regulated business you have to be big. When regulations come in, we usually expect that businesses will find it too expensive to continue. So, they sell off or move. Anti-money laundering regulations for crypto businesses are coming into force for the whole industry this year. This will put a lot of crypto businesses out of business.

This is why we created Blockpass. Make it very easy and cheap to comply but have the best compliance in the market.

Most of the KYC vendors in the market lock in their clients for 2 or more-year contracts. We take that out. Blockpass is pay as you go. You only pay for what you use.

Integrating KYC into a business is a pain. Sometimes you have to integrate a vendor to check passports and a vendor to check sanctions list. It is complicated and time consuming. With Blockpass we are taking out that friction completely. A business just signs up on our website and generates a button which they send to their customers. That’s it. The business doesn’t have to think. They choose KYC Connect our full KYC package and they know that we will cover everything.

The kyc market checks users over and over again even though those users have already been checked. It is a complete waste of money. The way to fix that is give users a digital identity. That’s what we do. So, our 10k verified users don’t need to redo the verification process every time they sign up with a business. By not repeating this we can pass on the cost benefits to business by reducing the cost of verification.

Basically, compliance should be easy and cheap for businesses. That is our goal. Make it easy to follow the law. If you make it easy, then less businesses will make mistakes.

For users their experience of accessing regulated services is terrible at the moment. By giving users a digital identity, they can start to enjoy trying out new services without the headache of KYC. Just one click on the Blockpass app and they are verified.

As banks shut bank branches and every financial services provider is online you need an online identity too that you can reuse for all the services you want to access.

At Blockpass our community matters most. We give PASS tokens to all our new members as a ticket for them to join the ecosystem we are building. Once they are verified, they get benefits of being a member and accessing the services of our partners in one click. We want people who are hearing about crypto for the first time to come to us and create a digital identity and have a great experience of choice of different services they can access in one click and special offers from our partner businesses. When I first discovered bitcoin I had to do a lot of the work myself to understand who could be trusted and what to use. With Blockpass we want to make crypto easy for people, compliant and safe.

 

Once investors are verified, how often will they need to update their KYC documentation?

That depends on the merchant and jurisdiction. In the Blockpass console, the frequency of updates can be set by the merchant.

 

This was designed for the blockchain industry but could be used for many more applications, can you share what types of merchants would benefit from this application?

It could be used by any business that operates in a regulated industry, such as banking, stock trading, precious metals and gems trading, insurance and gambling.

 

Blockpass has the PASS utility tokens, what are these tokens for, and are they necessary to use the platform?

PASS tokens have KYC within the token. We created a token that needs the sender to be checked to send the token to someone else. Our tokens are how we register new members into the Blockpass ecosystem. We call this PASS Club. PASS Club members get access to content and special deals from our merchants such as free bitcoin brokerage fees, gold storage or a fee waiver for a bank account opening.

 

The PASS tokens also enable access to the PASS club. What is this club exactly?

We want to create a community of people in crypto that embrace crypto and have access to reliable information about vendors in the crypto space. PASS Club is about users also getting access to the best deals from the merchants we add to our marketplace. If they have a special offer, we want to give that to our PASS club members.

 

Could you tell us about the Blockpass Identity Lab and its collaboration with Edinburgh Napier University?

We founded the Blockpass Identity Lab in September 2018, which is led by renowned British computer scientist Professor Bill Buchanan.

 

You also offer PASS Verify which could benefit Dapp developers, what is this exactly?

PASS Verify is essentially a lower level of verification compared to our flagship product – KYC Connect. PASS Verify only provides Face Match and AML Monitoring services, while KYC Connect, in addition to Face Match and AML monitoring, also includes ID document authentication and Proof of Address verification. PASS Verify is also the gateway for users to become members of PASS Club, an exclusive e-commerce network for crypto enthusiasts powered by Blockpass and the PASS token.

To learn more visit Blockpass.

 

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Marko Hafez, President & CEO of Blockstation – Interview Series

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Marko Hafez, President & CEO of Blockstation - Interview Series

Marko is a serial entrepreneur and innovator who started his first company at the age of 19 and never looked back. His passion for blockchain technology and the transformative potential of tokenization for financial instruments led him to co-found Blockstation.

You were an early believer in digital securities, having launched Blockstation in 2014. What was it that made you a believer before everyone else?

I first learned about the Blockchain capabilities in 2010 and monitored the price of Bitcoin up through 2014. I did extensive research to understand how records on the Blockchain are immutable and how it enables us to transmit value across the globe in the fastest and most cost-efficient way possible. Those facts, plus how the price of Bitcoin demonstrated significant growth in just 4 years, were major validation points for me.

I reached out to my good friend Jai Waterman, a software expert and eventual co-founder and CTO of Blockstation, to start looking into the Blockchain and the opportunities that come with it.

What we found was that most crypto marketplaces were (and still are) unregulated and have no proper Risk Management Protocols (RMPs), insurance, or regulatory oversight to provide investor protection, promote market efficiency and integrity – a big problem for mainstream adoption. Of course where there’s a problem, there’s an opportunity!  There was so much money, so much volume going through these marketplaces that the traditional financial ecosystem had no way to access.

There was no doubt in our minds that regulation for this new digital asset space was just a matter of time. Regulated financial institutions were going to have to adopt Blockchain technology in order to enable the trading of digital assets and enter this exciting new market.

At the same time, nobody was building a turn-key solution that would meet all of the entire ecosystem’s needs. You saw people focusing on custody, focusing on trading, but nothing holistic. It was clear to us that Blockstation would be the company to bridge the divide between blockchain technology and regulated financial institutions.

 

Can you share with us what Blockstation does?

To start, we are a Canadian FinTech company based out of Toronto that developed a compliant, Blockchain-driven, end-to-end platform for regulated stock exchanges and all their ecosystem  partners – brokers, depositories, regulators, market makers, everybody – to tokenize, list, trade, clear and settle digital assets and securities while fulfilling the same and functions they do for traditional assets.

In short: we enable the traditional financial ecosystem to get in on digital assets including Bitcoin, Ether, and Tokenized IPOs (Security Token Offerings, or STOs).

Our platform mirrors the traditional ecosystem but leverages smart digital processes and bolts on the blockchain to generate efficiencies, security and transparency, meeting Financial Action Task Force (FATF) requirements for Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF). It effectively lowers operational costs by optimizing workflow and processes for all stakeholders as well enabling investors to trade in a secure, reliable, and 100% insured environment.

Marko Hafez, President & CEO of Blockstation - Interview Series

 

In early 2019, Blockstation partnered with both the Barbados Stock Exchange and the Jamaica Stock Exchange in order to facilitate future Tokenized IPOs/STOs.  How did these relationships initially develop?

In 2017, a business development rep from the Jamaica Stock Exchange (JSE) heard about our platform and invited us to visit the JSE in Kingston, Jamaica, to demo our technology as well as provide some education about the blockchain and its benefits for the securities market.

Jai and I saw this as a great opportunity, as the JSE is the strongest stock exchange in the Caribbean and internationally recognized as well. It had just been named the world’s top-performing exchange by Bloomberg Businessweek in 2015. The JSE has continued to be a strong performer internationally and an ideal partner for Blockstation, again earning Bloomberg recognition for the same achievement in 2018.

After those first few meetings and demos with the JSE leadership team and the Financial Services Commission (FSC) of Jamaica, our visions were in alignment and the relationship progressed to launching a successful trading pilot in 2018 and a schedule go-live for early 2020.

During that same period, the Blockstation team grew to include talented people who brought existing relationships with institutions such as the Barbados Stock Exchange (BSE), and others. They provided valuable inroads for expansion to other markets, and we’ll be announcing partnerships with other exchanges throughout 2020.

 

What are some of the projects that will be launching on the Jamaican Stock Exchange?

As you know, the first four Tokenized IPOs to be listed on the JSE Digital Asset Trading Platform (DATP) were recently announced on stage at the JSE Investment and Capital Markets Conference 2020.

Also, our Smart Listing Accelerator Portal (SLAP) went live recently so issuers are now able to login and start creating their prospectus.

The five lead companies are:

Wipay from Trinidad (Money Transfer)

BRED from Toronto, Canada (Real Estate)

Lotus Energy from Australia (Energy sector)

VeleV Capital from Toronto, Canada (Mortgage Investment Corporation)

Connoisseur Culture (CBDMS)  from Montreal, Canada (Cannabis)

Other sectors in the pipeline include bio-health, video game publishing, music, sports, and mining.

Our full list of upcoming listings is available here

 

Do we have a date yet for when the first project in Barbados will launch and what are these projects?

We received interest from several issuers with the desire to initiate their tokenized IPO on the BSE.  We don’t have a specific time on this launch but everything is moving in forward and we look to potentially go live this year.

 

You’re based in Toronto, Canada, home of Ethereum and many more exciting blockchain projects. Do you feel that being based out of Toronto has been beneficial to Blockstation?

Toronto is home to a lot of people who are talented and knowledgeable about the blockchain and capital markets, plus it’s a hub of international commerce. We’ve made a lot of fantastic connections just by being located where we are, some of whom are on the Blockstation team right now.

 

In November 2019, you announced joining and taking a leadership role in the Crypto Asset Working Group organized by IIROC, a Canadian self-regulatory body. What are the goals of this organization?

The ball has been rolling in Canada for a while now, helped along by the mid-2019 release of the FATF report, which recommended a global standard for digital assets including the same AML and CTF requirements for Digital Asset Service Providers as for traditional financial institutions.

IIROC’s Crypto Asset Working Group (CWG) was created in late 2019 with the goal of developing a regulatory framework for crypto assets while addressing market integrity and investor protection. It’s highly collaborative, with representation from financial institutions and technology companies from every aspect of the industry – including Blockstation team member Linda Montgomery.

Our participation on this working group speaks to Blockstation’s status as a leader in compliant digital assets for the regulated marketplace, particularly as it relates to our ChainWatch AML/CTF tool. Our regulation-first approach is one of the major reasons we received a no objection letter from the Financial Services Commission of Jamaica and are able to move forward with the JSE.

We’re excited to be part of the IIROC working group and look forward to leveraging our successful partnerships with other securities regulators to develop a framework that works for the Canadian marketplace.

 

What are some of the other projects that BlockStation is working on?

It’s 2020 – it’s time that regulated digital assets became an everyday, mainstream reality in Canada and the US. While both markets have taken baby steps with some degree of licensing for service providers and a handful of institutions like Fidelity or Bakkt making headlines, we just aren’t there yet.

At Blockstation, we feel the time is right to build on regulatory efforts so far and bring industry participants together to demonstrate exactly what a full framework for a compliant, end-to-end digital asset ecosystem could look like in action.

In Canada, that means a live digital asset trading pilot to complement and inform the efforts of the IIROC working group. I can confirm that we already have interest from a number of motivated ecosystem participants including brokers, stock exchanges and even depositories, and we’re excited to move forward with a pilot in our own backyard.

In the United States, we’re working to unveil a new service offering entirely: end-to-end broker and issuer support for STOs in full compliance with securities regulations.

Issuers will benefit from the same tools for disclosure documentation, token issuance, and lifecycle management while being able to reformat their filings for various regulators in different jurisdiction. For brokers though, it’s a real game-changer. Once they’re on board, they’ll have centralized access to the full database of issuers, complete with an intelligent risk-profile matching engine that connects them with the opportunities that best match their needs.

 

Is there anything else that you would like to share about Blockstation?

Blockstation is more than a FinTech company. Our team brings years of expertise in compliance, risk management, and capital markets. We’re always thinking years ahead to ensure that technology for traditional financial institutions is ready and waiting when regulations come into effect.

We do this successfully by having extensive and productive discussions with central banks, regulators, stock exchanges, custodians, brokers, issuers, and investors from across the globe. This collective data gives us an edge and a clear vision on what direction to take in developing the right technology at the right time.

We are blessed to have a great team with the right experience to execute on our current and future goals, and we look forward to a bright 2020 for Blockstation.

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