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.”
BitBond Finance BmbH STO Hits €2.1 million
The enterprise lending solutions provider, BitBond Finance concluded its STO this week. The public crowdfunding event officially started in March of this year. In total, BitBond secured €2.1 million in funding from the STO. Interestingly, this event was the first regulated STO held in Germany.
Now, BitBond seeks to expand its platform’s service to include a host of other digitized products. These products are first to include tokenized bonds. Tokenized bonds, much like tokenized shares, utilize blockchain’s efficiency to reduce delays and costs associated with transactions.
The STO propelled BitBond into the spotlight. The media coverage alone was impressive with the company receiving over 1000 articles covering the event. Unsurprisingly, BitBond’s STO saw participation from 87 countries. Most of which, the firm has issued loans in.
Earlier in the year, the German securities regulator, BaFin, approved BitBond’s application. As one of the first platforms to be licensed, BitBond represents a shift in the traditional business systems employed. As part of the approval, the platform gained an International Securities Number. This number allows BitBond to remain compliant across borders. This is critical to the company’s all-inclusive strategy.
BitBond Finance Investors Benefits
Investors received BB1 tokens for their contributions. Token holders receive a profit share from the company’s new platform. According to STO details, investors receive 4% per annum to start off with. After a specified time, these returns will go up to as high as 8%. In total, 60% of BitBond’s future profits are earmarked for investors.
BitBond entered the lending market in 2013. At that time, it was among one of the first instant lending platforms to offer services worldwide. The company currently issues €1 million in loans a month. Now, BitBond intends to leverage its positioning to enter into the tokenized bond market in a major way.
BitBond will issue tokenized bonds using its own proprietary software. As part of the new licensing, the company handles, clearing, settlement, and custody of these digital assets. Tokenized bonds clear much faster than traditional bonds. For comparison, tokenized bonds can clear in hours, versus days. Now investors have a better alternative to consider.
BitBond’s lending platform has seen great success to date. The platform utilizes a blockchain-based peer-to-peer protocol to facilitate near-instant loan approval. The company provides access to funding to medium and small-sized businesses. The speed and global reach of the platform were previously unimaginable prior to the advent of blockchain technologies.
Traditional Financial Institutions
BitBond also works with traditional lending institutions. Earlier in the year, the firm partnered with a German online bank to send funds internationally. The program was a huge success which helped cement BitBond as a major player in the tokenization marketplace.
BitBond has shown that it has a strong understanding of the global marketplace and how blockchain technology can increase efficiency. More importantly, the firm continues to be a pioneer in the digital economy. You should expect to hear more big developments surrounding this platform in the coming weeks.
DigiMax & Entoro to Collaborate as Advisors on Digital Security Offering
In the upcoming Leonovus Galaxa STO, a pair of promising companies have decided to collaborate as co-advisers. This would be United States based Entoro and, Canada based, DigiMax.
With a mutual goal shared between the companies, this collaboration was undertaken to capitalize on the strengths and weaknesses of each company.
U.S. versus Global
In their announcement, the companies indicate that, while Entoro has much to offer, their experience lies within the confines of the United States. DigiMax, on the other hand, has experience on a more global scale.
Between the two of these companies, Leonovus stands to benefit from a versatile, and competent, team of advisors. The companies note that, beyond this perk, the collaboration will allow for future referrals between one another, as their client base requires it.
In announcing their collaboration with one another, representatives from each, Entoro and DigiMax, took the time to comment. The following is what each had to say on the matter.
Chris Carl, CEO of DigiMax, stated,
“We are excited to be partnering with Entoro to assist one another in advising and funding our collective issuer clients…We believe that Entoro is the definitive leader in providing proper advisory services for issuers of digital securities in the United States and this is the kind of highly diligent and compliance-oriented company that DigiMax seeks to partner with. We believe there are many synergies to be gained for each of our companies from this formal collaboration with most of these benefits accruing to our clients.”
James C. Row, Managing Partner of Entoro Capital, stated,
“We view DigiMax as a global leader in bringing awareness of the importance of regulatory compliance to every step in the process of companies issuing digital securities and we are impressed with the global brand that DigiMax has built. We see a great deal of opportunity for both of our companies to accelerate as a result of this collaboration agreement. We have a high appreciation of the professional level of conduct by DigiMax from our observations working with them on our first client tougher.”
DigiMax is a Canadian company, based out of Toronto, Ontario. This young company has developed a suite of services built to facilitate capital generation events, such as STOs and DSOs.
CEO, Chris Carl, currently oversees company operations.
Operating out of Houston, Texas, Entoro functions primarily as an investment bank. Since launch, Entoro has expanded their services to facilitate blockchain ventures and digital securities.
Managing Partner, James C. Row, currently oversees company operations.
In Other News
Both, DigiMax and Entoro, have found themselves as regulars in our headlines. Over the past few months, each of these companies have made positive developments, as well as found themselves working on the same project. Check out the following articles to learn more about these events.
Will Facebook Subsidiary, Calibra, See the Light of Day?
The Announcement – Calibra
Facebook announced a pair of tokens recently. The project, which is being spearheaded by Facebook subsidiary, Calibra, will see both a stablecoin, and a security token, released.
While the stablecoin is meant to provide a global consumer base with an efficient means of transferring value, the security token facilitates project governance, and the development of a cash reserve.
Due to the potential of this project to significantly impact global currencies, and the financial system, the project has received much backlash, to date.
Upon initially announcing the project, many suspected that the world’s greatest population of humans, India, would not be eligible for participation. This suspicion was born from the on-going battles within the country, between blockchain advocates and central banks.
As suspected, Facebook and Calibra have since verified these suspicions by stating the project will not launch in regions where such currencies are outlawed. They do remain hopeful that perspectives may change in the future.
Alexandra Voica, Facebook representative, states, “Calibra will respect the legislation”, “But we are looking to work with regulators to see if the legislation can be updated”.
Meeting with Congress
On July 16th a Congressional hearing will be held, followed by a similar hearing in front of the House Financial Services Committee on the 17th. The main focus of these hearings will be the testimony of Calibra representative, David Marcus, as he discusses the project and two tokens to be released.
After making their intentions known to the public, Facebook and Calibra were greeted with a response of fear and outrage by government authorities. While some point to Facebooks past track record regarding privacy lapses as a main concern, others see Libra for what it could potentially be – a competitor to the USD.
Facebook has too much power and a terrible track record when it comes to protecting our private information. We need to hold them accountable—not give them the chance to access even more user data. #BreakUpBigTech https://t.co/eQr06VMMyx
— Elizabeth Warren (@ewarren) June 19, 2019
Whatever the case may be, this hearing will provide Facebook with the opportunity to give the answer Congress is looking for. Now is the time to allay any fears that regulators may have regarding the project.
While there are surely a plethora of factors driving the price trajectory of Bitcoin, the outcome of the congressional meeting regarding the Calibra project weighs heavy.
Anticipation of these meetings has been met with a swift decline in overall marketcap and prices in the days leading up to it. Time will tell, but most suspect a positive outcome of these meetings will be met with a positive uptick in pricing. A positive outcome is, however, far from a sure thing.
Tweets discussing cryptocurrencies are typically white noise. There are an exorbitant amount of industry players always weighing in on the state of the industry. However, when the POTUS begins tweeting on the subject, people listen.
…and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Whether you are a fan or a detractor of the POTUS, the fact that cryptocurrencies have captured the attention of the highest levels of government speaks volumes to the development witness within the industry in recent years.
Before the meetings with Congress ensure, Facebook and Cablira have already made it clear that they will not be launching the product until the authorities are satisfied with the projects structuring.
In his prepared testimony for the hearings, David Marcus writes the following,
“The time between now and launch is designed to be an open process and subject to regulatory oversight and review…We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
While there may be unavoidable delays due to hearings and potential restructuring of the project, the fact remains that with the combined clout and influence of the companies involved in this project – Facebook, VISA, PayPal, UBER, MasterCard, etc. – it is hard to imagine Calibra failing.
- BitBond Finance BmbH STO Hits €2.1 million July 17, 2019
- How to get an STO approved by German regulators – Thought Leaders July 16, 2019
- DigiMax & Entoro to Collaborate as Advisors on Digital Security Offering July 16, 2019
- Will Facebook Subsidiary, Calibra, See the Light of Day? July 15, 2019
- Mikko Ohtamaa, CTO at TokenMarket – Interview Series July 15, 2019