Connect with us

Security Token News

SEC Lays Multiple Charges Against EtherDelta Founder

mm

Published

 on

SEC Lays Multiple Charges Against EtherDelta Founder

The SEC (Securities and Exchange Commission), is tasked with governing United States financial markets.  Their goal is to ensure fair markets and the protection of investors.  They achieve these goals through regulations which enforce security measures such as KYC, and AML.  In doing so, companies issuing securities are responsible for financial transparency on investments received.

Many in the cryptocurrency world that sought to circumvent SEC regulations thought that DEX (Decentralized Exchanges), were the perfect way to do so.  These exchanges facilitate the trading of digital assets without the need for an intermediary.  By eliminating this third party to facilitate trading, investors gain the ability to simply ignore security measures enforced on traditional exchanges.

Etherdelta Charges Laid

Today marks the first time the SEC has taken action against a DEX.  Recent news indicates that the SEC has charged the founder of the DEX known as EtherDelta.  This particular DEX is one of the largest in the world.

In their press release, Enforcement Division Co-Director of the SEC, Stephanie Avakian, justifies their actions by stating, “EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption.”

Also commenting was Enforcement Division Co-Director, Steven Peikin.  He stated, “We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology…But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.”

For his actions in founding/operating EtherDelta, Zachary Coburn settled charges with the SEC.

–         $300,000 for disgorgement

–         $13,000 for prejudgment interest

–         $75,000 penalty

He was levied with these charges under the pretense that he was operating an ‘unregistered national securities exchange’.

An End in Sight?

Despite being one of the most commonly used DEX platforms, the volume seen on EtherDelta is miniscule compared to centralized crypto exchanges.  Time will tell whether this news impacts recent gains seen within the cryptocurrency market.

 

This is not the beginning of the end for DEX.  Although the founder has been charged, decentralized exchanges serve more purpose than to simply allow the circumvention of security measures.  In some cases, they actually provide much higher levels of security when completing trades.  Any time a trade takes place, and is facilitated by a centralized exchange, you are reliant upon their services.  This means that you must store your funds within their wallets, and simply hope that they are not the victim of a hack.  With a DEX, you are able to transfer from wallet to wallet, eliminating the needed trust of a third party.

While the future may be bright for eventual secondary market trading of security tokens, it is clear that the SEC does not approve of DEXs.  Hopefully, services such as Bakkt, Securitize, and others have better luck in avoiding the wrath of the SEC.

Spread the love

Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Security Token News

Prometheum Acquires InteliClear Post Trading Systems

mm

Published

on

Prometheum Aquires InteliClear post trading solution

The popular security token exchange Prometheum announced the acquisition of the InteliClear clearing system this month. The addition places Prometheum as the front runner to be the first SEC-registered all-inclusive Alternate Trading System (ATS). The news showcases the growing competition in the sector and symbolizes a shift in strategies amongst the top exchanges.

An Industry First

Currently, no ATS has the ability to clear transactions in house. Traditionally, exchanges utilize a third-party clearinghouse to complete trades per the Security Exchange Act (SEA). This process adds time and additional fees to the transaction. Prometheum seeks to speed up the entire process via the InteliClear integration. Now clients can settle transactions in hours versus days.

A Milestone

Discussing the maneuver, Prometheum CEO, Aaron Kaplan called the acquisition a “milestone” for the security token industry. He spoke on why InteliClear’s system is an excellent addition to the company’s portfolio. Finally, he discussed the importance of Prometheum becoming the first end-to-end security token trading solution.

Prometheum

The Prometheum exchange entered the market with the goal to provide users with a complete ecosystem for tokenized securities. The New York-based firm was one of the first SEC approved tokenized securities platforms available to the public. The company originally filed with the SEC back in November 2017.

Prometheum via Homepage

Prometheum via Homepage

Today, the platform hosts some of the most notable security tokens ever launched including Lottery. The Lottery STO made headlines after providing investors an opportunity to participate in revenue derived from the company’s gaming platform for charitable fundraising.

InteliClear

Investors now gain access to more value after the InteliClear acquisition. InteliClear provides businesses with a host of helpful pre and post-trade services. The company uses a custom-built transaction engine that enables importation of trades and transactions from multiple sources. These turnkey and custom solutions enable businesses to fulfill their STO ambitions with the least amount of funding necessary.

The InteliClear system supports tokenized equities, options, fixed incomes, mutual funds, money/market products, and of course, tokenized assets. The global network is able to utilize a host of national currencies and can handle real-time, high volume, operations. The platform automatically calculates trade compression, fees, commissions, and billing to simplify the entire process for businesses.

Security Token Sector Gets More Competitive

The security token arena continues to see more competition develop. The recent SEC approval of numerous A+ filings enables platforms such as Prometheum to take its platform to the next level. Today, the number of security token exchanges in operation continues to expand at an impressive rate.  Already, the SEC approved Blockstack, the Props Project, and YouNow’s STO platforms this year. After taking over a year to approve some of these projects, the news is welcomed by the cryptocommunity.

Prometheum Leads the Race

Prometheum now has the tools and capabilities to take a strong lead in the developing security token sector. You can expect to hear more from this exchange as it continues on its STO launch course. For now, Prometheum is the only security token exchange to provide such robust functionality in the market.

 

Spread the love
Continue Reading

Security Token News

KoreConX Expands on Services Through POSConnect

mm

Published

on

KoreConX Expands on Services Through POSConnect

Partnering

It was recently announced that KoreConX has established a new alliance with payment solution specialist and tech provider, POSConnect.

This move will also see POSConnect join the KorePartners – a grouping/ecosystem of companies, brought together to provide a comprehensive suite of services to clients.

Capital Markets

The alliance was undertaken with the goal of continuing development and functionality of the KoreConX capital markets platform. By integrating services provided by POSConnect, KoreConX will not only gain the ability to offer a secure payment solution, but build out their platform, aimed towards helping broker/dealers, and the management of security tokens.

Broker/Dealer

Broker/dealers continue to play a pivotal role in the digital securities sector. Recognizing this, we recently took a brief look at the various designations doled out to industry participants, and the services they offer.

Titles and Designations Among Industry Participants

Commentary

Oscar Jofre, CEO of KoreConX, stated,

“Our goal with building the KoreConX Capital Markets solution is to provide the much-needed infrastructure for the private company capital markets. We wanted to remove friction and fragmentation by bringing the tools necessary to one secure, user-friendly platform…We are thrilled to be working with a company such as POSConnect that not only provides the best technology but also follows the same governance standard that we do.”

Will Gravlev, President of POSConnect, stated,

“It is important for us to partner with companies that focus on offering the best solutions, and we believe that KoreConX is one of those. Their easy-to-use platform was created with the end-user always in mind, and the same goes for the solutions we offer.”

KoreConX

Founded in 2016, KoreConX maintains operations in New York. The company operates with the goal of providing a comprehensive grouping of services, aimed towards managing the core areas of a business. Through various established partnerships, along with the use of technologies such as blockchain, KoreConX is able to address a variety of needs, ranging from portfolio management, to cap-table management, and even investor relations.

CEO, Oscar Jofre, currently oversees company operations.

POSConnect

Acting as payment processing specialists, POSConnect is an established company, which maintains headquarters in Toronto, Canada.

POSConnect describes their core technology as a cloud-driven EMV/NFC payment solution, which was built with the intent of bringing new levels of efficiency to raising capital.

In Other News

KoreConX has been quite active over the past year, with their efforts resulting in multiple companies utilizing their services. Over the past few months, a variety of companies have decided to host a DSO through KoreConX. The following articles take a brief look at these announcements, and what to expect moving forward.

Libra to Utilize KoreConX in Upcoming Digital Security offering

MintHealth to Host Digital Security Offering through KoreConX

PCF Capital to Host $250 Million DSO through KoreConX

Spread the love
Continue Reading

Security Token News

Warner Music Invests in CryptoKitties Creator, Dapper Labs

mm

Published

on

Warner Music Invests in CryptoKitties Creator, Dapper Labs

From Streaming to Blockchain

Warner Music Group has recently announced that they have invested in Dapper Labs. This investment, which came in to the tune of $11.5 million USD, was completed as Warner Music eyes new markets surrounding digital collectibles and non-fungible tokens.

In a digital world, where content pirating is commonplace, blockchain affords the ability to infuse digital content with pre-determined and ensured scarcity. As collectible markets are often driven by rarity, Warner Music believes that this move has potential to open new, lucrative doors.

CryptoKitties by Dapper Labs

If the name Dapper Labs sounds familiar, this is most likely due to the fact that they are the creators of CryptoKitties.

This blockchain based game became wildly popular in late 2017, as users worked to collect unique digital collectible kittens. Beyond its simple popularity, the game gained notoriety due to the fact that it, basically, stalled the Ethereum Network upon launch.

While the Ethereum network has grown stronger and more efficient in the time since, a simple game provided a stark reminder at the time that the blockchain industry was, and is, young and unproven.

Going with the Flow

The money being invested is intended to be used by Dapper Labs to create a new blockchain known as ‘FLOW’. This blockchain will be purpose built to handle applications such as CryptoKitties, and digital collectables.

SEC Approval

Investors in Dapper Labs, which now includes Warner Music, will be receiving traditional securities representing company stock. What is unique about the move, however, is the future ability to convert these securities to tokens, which can be used on the platform yet-to-be developed.

The way the deal is structured, for this to occur, the SEC will need to provide their approval. Time will tell if the SEC shares the views of Dapper, and agrees on whether the tokens represent utility tokens, or security tokens.

To date, while the SEC has cracked down on many past ICOs which sold tokens viewed as securities, they have recently shown a willingness to work with companies being forthright with their intentions. This was made evident, most recently, as BlockStack completed their own token generation event. This particular event saw the SEC approve the sale of tokens, which were described by BlockStack as utilities.

Commentary

In making their announcement, Jeff Bronikowski, VP of Business Development at Warner Music, took the time to discuss, with Forbes, their mindset. The following is what he had to say on the decision:

“When I was in college, you’d walk into someone’s room and you’d see 200 CDs and you would say, ‘That guy’s a big music fan.’ And now you just see somebody with a music subscription service and some playlists…We think that as people spend more time crafting their persona in the digital realm, digital goods and collectibles is a great way to express that fandom.”

Warner Music Group

Warner Music is a New York, New York, based company, which specializes in services surrounding the entertainment industry. From streaming services, to hosting a variety of record labels, Warner Music is all about helping artists, and delivering desired content to consumers.

CEO, Stephen Cooper, currently oversees company operations.

Dapper Labs

Founded in 2018, Dapper Labs is a Canadian company, which maintains headquarters in Vancouver, British Columbia.

CEO, Roham Gharegozlou, currently oversees company operations.

In Other News

The decision by Warner Music Group to enter blockchain is no surprise. Various subsets of the entertainment industry have dipped their toes into blockchain over the past year. Recently, this was seen through multiple partnerships involving film, and industry participants such as tZERO.

Tokenizing Film with BLOQ FLIX and tZERO

Atari Biopic to Undergo Tokenization through tZERO and Vision Tree

Spread the love
Continue Reading