Security Token News
SEC Settles with Floyd Mayweather and DJ Kahlid after Promotion of ‘Security Tokens’
Celebrities in the crosshairs SEC lands knockout blow
The SEC continues to broaden their mission of cracking down on securities crimes. In recent news, it has come to light that boxing great, Floyd Mayweather, along with celebrity, DJ Kahlid, has come to a settlement.
Both individuals were accused of illegally promoting various ICOs throughout the summer of 2018. Unfortunately for the duo, they did not disclose to potential investors that they were actually paid to do so. By omitting this fact, this means they were in breach of long-standing securities laws.
Terms of the settlement indicate that although neither will plead guilty, or admit fraud, a financial fee will be paid.
Steven Peikin of the SEC, stated, “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements…Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”
Floyd Mayweather
Mayweather is a United States boxer that will go down as one of the greatest of all time. He is an individual known for a persona outside of the ring, as big as his presence within it.
The charges laid against Mayweather total $600,000 due to his involvement in 3 ICOS. His involvement saw him on the receiving end of $300,000 for his endorsement of the platforms.
DJ Kahlid
Although his name may be more obscure than that of Mayweather’s, Kahlid is certainly an influencer on social media. As such, he found himself in the same situation as Mayweather – Promote an ICO and receive a hefty payday.
Unfortunately, he also failed to disclose this fact to investors. As Kahlid only took part in endorsing one ICO, settlement charges for him rang in at $150,000.
SEC not just targeting ICOs
This targeting of ICO promoters comes on the heels of the SEC broadening their mission. In recent weeks we have seen the SEC branch out from charging not only token issuers themselves, but exchanges that have facilitated the trade of said tokens.
It is reasonable to assume that if the SEC has a foot to stand on, they will continue to charge anyone they can with relations to fraudulent securities.
Pop Culture Prevalence
With this case against Mayweather and Kahlid, there are sure to be various other celebrities resting uneasy of late. Other celebrities known to have endorsed or promoted ICOs in recent times include, but are not limited to the following.
- Jamie Foxx
- Cobinhood
- The Game
- Paragon
- Paris Hilton
- Lydian
In the cases of Mayweather and Kahlid, per terms of the settlement, the duo are banned from promoting any form of security for 3 years. Not that they would have any interest in doing so now, anyways.
The largest decentralized exchange in the world, Vtoken, obtained its SEC filing from the United States Treasury Department this week. The firm took to the world-famous NASDAQ billboard in Time Square to celebrate the move. This is the second time the company graced this iconic attraction seen by millions. Also, the move symbolizes further blockchain integration into traditional securities markets.
Speaking on these developments, Vtoken’s Chief Advisor to the Asia Pacific Region explained how his firm plans to cultivate a robust blockchain ecosystem. He took moment to discuss recent global developments in the security token space. Specifically, he touched on how both Chinese and American markets experienced a huge surge in blockchain-based firms.
Vtoken Platform
The Vtoken combines the regulatory protections found in the traditional securities markets with the efficiency of a blockchain -based system. The company offers transfer agents flexible solutions to many of the current issues plaguing the securities markets.
For example, traditional securities can take three days for trades to complete. This delay leaves investors in a less than optimal position. In contrast, Vtoken’s blockchain-based system can complete trades in a matter of hours. Consequently, the platform enables a more nimble trading experience.
Vtoken via Homepage
Real World Experience
Vtoken is a unique hybrid of technology, compliance, experience, and professional customer service. The firm handles a wide range of clients but specializes in Regulation A transactions. To date, Vtoken’s clients include NASDAQ, NYSE, OTC-listed firms, IPO-issuers, and private investors.
Vtoken’s strategy is unique in that the firm created a complete blockchain ecosystem. Here, investors can get all the information they need to host a compliant STO. The company offers a full range of solutions for both enterprise and private investors. These services include pre and post token issuance and management, smart contract programming, and ownership protection.
The latter feature is unique to V-token. This functionality allows investors to restore lost or stolen tokens, an option not usually available in the blockchain space. More importantly, Vtoken is now in a very exclusive class of decentralized exchanges registered with the SEC.
Vtoken
Vtoken shares many of its core developers with Ripple. Additionally, Vtoken utilizes graphene underlying technology. The token has a trading gateway that is similar to Stellar Lumens. This enables the platform to maintain optimal transaction speeds. Currently, Vtoken can process transactions faster than the third-generation crypto EOS.
Partnerships
Last month, Vtoken made headlines after forming a strategic partnership with blockchain payment platform PayDex. The PayDex platform functions on Vtoken’s public blockchain. The system provides global crypto settlement with support for BTC, ETH, VToken, USDT, VRT, YEC, EOS, LTC, and VUST. PayDex seeks to bring crypto payments to the masses through a simplistic mobile interface.
Vtoken Ecosystem
Vtoken’s all-inclusive approach to the market is crucial to its overall strategy. V-Token provides users with everything they need to become a player in the security token market. You can expect to see this firm continue to make headlines s the platform expands in the coming months.
Secondary Markets
‘Making Illiquid Assets Liquid’ – That is the guiding sentiment behind AlphaPoint, a young company which utilizes blockchain to facilitate tokenization.
This idea is one step closer to becoming a reality, as AlphaPoint has just announced a partnership with Elevated Returns – A forward thinking company which specializes in real-estate.
In this announcement, the pair has indicated that they will be developing a secondary market for trading digital securities backed by real-estate. It is through secondary markets that traditionally illiquid assets, such as real-estate, will become easily tradable – all the while opening up fractionalized ownership, and opportunity for exposure to retail investors.
Elevated Returns will focus these efforts on Asian markets, following their expansion into the region roughly one month ago. At the time, the company acquired a large share in a Thai broker-dealer – a move allowing for them to commence operations through previously attained licensure.
Commentary
In their press release, Stephane De Baets, President of Elevated Returns, commented on this development. The following is what he had to say on the matter.
“Elevated Returns prides itself on our reputation as a pioneer in the digital securities space. To that effect, we have a policy to partner with the best in class companies across industry verticals; AlphaPoint’s technology solutions for unlocking digital asset liquidity are unparalleled. Having already demonstrated the capability to integrate with the token standard that we are developing on the Tezos blockchain, AlphaPoint was the clear choice to facilitate the adoption of our tokenized real estate initiatives.”
AlphaPoint
AlphaPoint is a United States based company that was founded in 2013. With their sights set on ‘making illiquid assets liquid’, AlphaPoint has successfully serviced global customer through their various service offerings.
Since opening their doors, AlphaPoint has seen their diligent work towards growth land them customers in 5 continents, to date.
Company operations are overseen by CEO, Salil Donde.
Elevated Returns
Elevated Returns is a United States based company, which specializes in investments surrounding real-estate. Recognizing the potential of digital securities, Elevated Returns operates with a goal of acquiring assets viable for tokenization.
One such example was the noteworthy tokenization of the St. Regis Resort; A high-end ski resort that successfully sold digital securities representing ownership within the resort, becoming one of the first to do so.
Company operations are overseen by President, Stephane De Baets.
In Other News
We have detailed developments pertaining to both AlphaPoint and Elevated Returns in the past few months. Check out the following articles to learn a bit more about what each of these companies has been up to in this time.
Laureate Digital Partners with AlphaPoint on New Security Token Exchange
Elevated Returns and Securitize to Utilize Tezos for Digital Securities
Deadline Missed
Today, tZERO issued a statement to their shareholders, commenting on their ongoing investment by Makara Capital, which we previously detailed.
In this statement, they indicate that while this investment is on-going, further delay is unavoidable. After initially setting a mid-April deadline, the due diligence process is simply more time consuming than initially thought.
Commentary
In the update, distributed to its shareholders, Patrick Byrne expressed praise for Makara, while commenting on the tenuous nature of the deal and reassuring readers at the same time. The following are a few excerpts from this statement, highlighting these sentiments.
‘Makara’s due diligence has progressed, and in the course of its due diligence Makara has proven to be a professional and serious fund. Still, the parties will not have a definitive deal in place by the mid-April target.’
‘tZERO plans to continue facilitating Makara’s diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives. We will update shareholders after tZERO signs definitive documents.’
‘Our retail firm is recovering more dramatically than I anticipated and discussed during our Q4 2018 earnings call. In addition, tZERO is on track to introduce the products described in that phone call. Our intense focus on execution is paying off.’
Many Pots
This news may be slightly disheartening, as it represents, not the first, but second hiccup in the investment process. Despite this setback, tZERO has been on a tear over the last year. They are not being held back by this process.
tZERO has their hands in many pots, with endeavours resulting in the launch of a trailblazing secondary market for digital securities. Beyond this, tZERO has seen progress through adoption, and the awarding of patents.
tZERO
tZERO is a United States based company that was founded by Patrick Byrne. A subsidiary of Overstock, tZERO functions as a platform catering towards the digital securities sector.
Founder, Patrick Byrne, has reiterated his strong belief in digital securities multiple times over the past year. He has gone so far as to shift his entire focus from Overstock to tZERO and its ongoing development. Unmoved by ‘crypto winter’, Patrick Byrne has, in the past, commented to The Wall Street Journal, on the potential of tZERO. He stated, “I don’t care whether tZERO is losing $2 million a month…We think we’ve got cold fusion on the blockchain side.”
In Other News
tZERO is a regular in our news feed, as they have been pivotal in establishing the digital securities sector in its infancy. Below are a few articles detailing past developments pertaining to this impressive and important company.
GSR Capital turns to tZERO for the Tokenization of Cobalt
tZERO Completes Distribution of Security Token
Overstock Repositions Blockchain Executives as tZERO Launches