In an astounding few hours, the Cannabis based company, Paragon, experienced an almost 10,000% pump in price to ring in the new-year.
Unsurprisingly, the token has been unable to sustain this absurd increase in value. A peak price of $10 per token was reached, after beginning January 1st at around $0.1 per token. In the time since this, prices have returned to roughly $0.3 per token.
A pump-and-dump group is believed to be have been responsible for this short-term growth. It is important to note that this rapid rise was only seen the exchange known as YoBit. This isolated response further cements the notion that these price actions were the result of a pump-and-dump scheme.
Co-ordinators behind the pump were most likely capitalizing on the upcoming deadline for the return of investors’ funds from Paragon.
Paragon was the subject of an investigation by the SEC earlier in the year. Upon doing so, the SEC deemed that Paragon illegally marketed and distributed digital securities, under the pretense they were not securities.
In addition, Paragon tokens would be registered as digital securities, and a fine paid to the SEC.
Some may recognize the name Paragon. It has previously been affiliated with US rapper ‘Game’. Acting as one of the first celebrities to endorse a blockchain project, ‘Game’ found himself on the wrong end of a lawsuit. This involved plaintiffs claiming that Paragon had falsely represented business dealings, with ‘Game’ being a spokesperson.
In the time since this, various other celebrities have found themselves caught up in similar situations. We recently detailed several of these HERE.
Pump and Dump Schemes
Simply put, a pump-and-dump scheme is a preplanned, coordinated event that is orchestrated by a group of individuals. These individuals will often take advantage of projects with upcoming news, and communicate a plan to artificially boost the price prior to news occurring. Participants will agree to continually buy the token/coin up until a certain price, and then all at once, sell their tokens.
This process takes advantage of individuals outside of the group. For example, individuals that purchased the Paragon token during the pump may have done so at $10, thinking that the project was finally taking off. Only to find that they were taken advantage of, with their money going to the group after they intentionally crash the price.
These schemes are unfortunately commonplace on cryptocurrency exchanges. They are especially common on smaller exchanges with low liquidity, as token prices are easier to influence. Not only are these groups illegally manipulating markets, but they are an active detriment to both the present and future of blockchain.
It should be noted that companies typically have nothing to do with pump-and-dump schemes at all. These events are orchestrated by random individuals with no connection to the token issuer.
Pump-and-dump schemes are a perfect example of the market manipulation causing hesitation by the SEC towards ETF approval.
The SEC has stated that until such schemes can be kept under control, an ETF will not be approved. As it is their job, afterall, to protect investors.
Paragon as a company has persevered throughout all these struggles. They continue their goal of revolutionizing the Cannabis industry through the implementation of blockchain.
Upon striking a settlement with the SEC in November, Paragon CEO, Ms. Versteeg, stated the following, “This resolution with the SEC gives Paragon the path forward to full compliance with the U.S. securities laws and clears the way for Paragon to pursue its vision of bringing transparency and accountability to the cannabis industry through blockchain technology. Paragon is proud that the PRG token is included in today’s action by the SEC and are thereby being granted the opportunity to avail itself of this groundbreaking path forward while continuing to pioneer efforts and to participate in the ever evolving ICO marketplace…We believe many purchasers of PRG tokens share our vision of revolutionizing the cannabis industry through blockchain technology, and this action today is an important step in solidifying our compliance and furthering developments of our state-of-the-art cannabis seed-to-sale technology platform and co-working space.”
Blue Ocean Management Partners Invests in Blue Ocean Technologies
This week, Blue Ocean Management Partners, LLC announced an investment in New York-based Blue Ocean Technologies, LLC. The firm intends to utilize its experience to provide much-needed senior management to Blue Ocean Technologies. The news showcases growing interests in the Blue Ocean platform.
Blue Ocean Technologies
Blue Ocean Tech seeks to expand the development of the after-hours markets for U.S.-listed securities, including ETFs and related securities. The new platform will provide U.S.-based traders the ability to track off-hours market movement and react accordingly. Importantly, investors will now be able to better manage risks.
Additionally, the platform provides opportunities for foreign investors to have after-hours access to the U.S. capital markets. Providing 24-hour access to the securities markets is important for a myriad of reasons. For one, it provides users with more investment opportunities. This data and technical services are critical for the functionality of numerous regulated trading venues.
Speaking on the developments, Blue Ocean Management CEO and President Ralph Layman described how the strategic partnership brings much-needed senior management resources to the platform. In turn, this experienced leadership can help guide the platform through its next growth stages.
For its part, Blue Ocean Management will provide management and expertise. The firm has experience building FinTech firms from startup. As such the company seeks to expand the support for 24-hour market access for both securities and EFTs. Together, securities and EFTs are the second largest class of investments across Asia and Europe.
Major Backing Continues
Blue Ocean management isn’t alone in its quest to further develop the off-trading hour capabilities of firms. Already, the FinTech firm managed to secure support from some of the largest players in the game. One such investor is tZERO.
Earlier in the year, Overstock.com’s blockchain subsidiary tZERO became another major backer in the Blue Ocean platform. tZERO is a market pioneer in the space and their backing showcases the true potential that Blue Ocean’s 24-hour strategy possesses. tZERO has filed numerous blockchain patents over the last two years. The firm is at the forefront of blockchain adoption.
Discussing the investment strategy, tZERO’s CEO, Saum Noursalehi praised the new partnership. He explained how the maneuver allows tZERO to “focus on its important strategic initiatives with digital securities.” tZERO seeks to tokenize the traditional financial markets over the next 5-10 years.
Blue Ocean Moves Forward
As the more industries migrate to a blockchain-based system, it’s important that developers create the ecosystem to support the robust capabilities of these new platforms. Both analysts and traders agree that 24-hour access to markets is one of the best ways to spur growth. This line of thought becomes more evident when you consider that this new strategy opens up the US market to international investors in a way previously unimaginable.
The Blue Ocean platform brings greater efficiency and transparency to capital markets. In this way, analysts predict the platform to be disruptive to the current systems. You can expect to hear more from this unique platform as development continues over the coming months.
BnkToTheFuture Eyes U.S. Based STOs through BMI Capital Investment
Recently, BnkToTheFuture has shed light on their future aspirations through a new investment. This move saw the Cayman Islands based company acquire a stake in United States based broker/dealer, BMI Capital.
By acquiring a stake in the company, BnkToTheFuture now gains the ability to make use of existing licensure held by BMI Capital – including their status as a registered broker/dealer.
With the future of blockchain holding a global appeal, many industry participants have announced their intent for expansion beyond their own borders.
The following articles demonstrate a few of these decisions, as companies beyond BnkToTheFuture look to enter foreign countries.
The importance of becoming a broker/dealer, by proxy or otherwise, cannot be understated. The designation allows for a company, such as BnkToTheFuture, to expand their services to include the buying and selling of securities.
For more information on the role assumed by broker/dealers, make sure to check out our terminology page.
“We forecast by 2020 up to 50 percent will opt for an innovative security token that improves the potential for returns for investors over traditional equity. We are aiming to build a new industry and asset class.”
Building a Foundation
Over the past few months, any have noted that the digital securities sector is slow to take off. With other capital generation events, such as ICOs, having experienced rapid growth in the past, many expected the same from digital securities.
A growing amount of companies have entered the sector from various points around the world. Each of these companies are hard at work developing the necessary infrastructure to support future growth.
It is important to recognize, however, that STOs are completed in a regulatory compliant manner, which requires participants to hold a variety of designations, such as that of a broker/dealer. Attaining these capabilities takes time.
The companies involved are not trying to run before they walk. A more strategic approach is being taken to ensure that the industry is ripe for growth when true adoption occurs.
Founded in 2011, BnkToTheFuture is a Cayman Islands based investment platform. The company specializes in utilizing new technologies, such as blockchain, to facilitate the offering of high potential opportunities for investors and companies alike.
This United States based investment firm which was founded in 2012. With licensure attained through FINRA, BMI Capital is able to operate as a broker/dealer.
CEO, Robert H. Trapp, currently oversees company operations.
In Other News
Over the course of the last year, we have covered events pertaining to BnkToTheFuture on various occasions. The following articles share insights into a few of these events.
Legend Siam Security Token Offering Facilitated by VEWC
Via East West Capital has recently opened up regarding an STO which they curated recently. This STO was a capital generation event which saw the distribution of tokenized securities associated with a cultural theme park in Thailand, known as Legend Siam.
Legend Siam Tokens
In this event, investors gained access to what the issuer calls ‘Legend Siam Tokens (LST)’. These tokens were treated as securities, and were offered through Reg. D guidelines under the SEC.
While details on the tokens, themselves, are scarce at this time, it appears as though they took shape as some type of real-estate backed token, based on the cultural theme park.
As the digital securities sector continues to develop, participants are being drawn in from new, interesting markets. In the past year we have reported on STO opportunities surrounding, but not limited to, the following industries.
With the announcement surrounding Legend Siam, we can now add ‘Theme Park’ and Commercial Real Estate to that list.
Via East West CEO, Oh Shen King, took the time to elaborate on STOs, stating,
“We predict a rise in the potential and demand for tokenized securities because digital ownership on the blockchain provides so many advantages over legacy investments, and tech-savvy investors are seeing the value proposition in real-time…This addition to our business is just a natural extension of our vision for a crowd-financed world, and we provide 100% transparency to all our investors.”
Via East West Capital
Operating out of Southeast Asia, Via East West Capital is an investment firm focused on ‘tokenized asset investments’.
CEO, Oh Shen King, currently oversees company operations.
Legend Siam is a well-known attraction in Thailand. It operates as a popular theme park, built with the intention of promoting Thai history and culture.
In their release, it is indicated that the park now spans over 65 acres, with hundreds of shops, and various attractions. In total, the park now has an estimated worth of over $131 million.
In Other News
Thailand has made it obvious that they are vying to become a leader in the blockchain industry, including digital securities. This much was made evident in a recent decision by their government to potentially legalize security tokens. In addition to this, there have been various blockchain based companies welcomed into the MAS FinTech Sandbox.