Request of the SEC
On December 12, Templum issued a formal letter to the SEC, outlining not only the potential impact that blockchain can have on various industries, but recommendations for asset treatment.
What did it entail?
Digital securities as a whole clearly need clarity. However, the request on behalf of Templum focused, primarily, on ‘guidance related to post-trade activities in the digital asset space.’
After listing various examples in detail that require guidance, Templum leaves the SEC with 3 simple points of recommendations. The following points are a directly from their letter:
- Clearly define when a blockchain technology platform must register as a clearing corporation and define how blockchain technology may be used by such firms.
- Provide clear guidance to the industry as to when a blockchain technology platform must register as a transfer agent and provide guidance to issuers of digital assets as to when they must use a transfer agent.
- Modernize the Custody Rule and the Customer Protection Rule to take in to account and encourage the use of blockchain technology’s ability to track securities transactions.
Closing out their request, Templum imparted their positive view on the potential of blockchain. They stated, “We believe that blockchain is a potent modernizing force in financial services. Blockchain has the potential to increase efficiencies in post-trade mechanics and increase auditability, both benefits that would greatly benefit the industry. In order to best take advantage of this potential, the SEC must modernize regulations related to clearance and settlement.”
The full request from Templum can be viewed HERE.
Not the first request
It should be noted that Templum is not the first to request clarity from the SEC. In September, 12 members of Congress implored the SEC to do the same.
This particular request was the result of a meeting in Washington. The meeting involved not only politicians, but individuals from within both the world of crypto, and wall-street.
Might be in vain
Despite the murky waters in which blockchain resides, requests on behalf of the SEC may soon become a moot point.
Recently making headlines has been the push for the re-classification of digital assets on behalf of multiple Senators. This particular charge is led by Congressman, Warren Davidson, who hopes to develop a new set of rules, better suited for modern technology. A far cry from the securities definition created 72 years ago.
SEC – A Brick Wall
Months ago, SEC chairman, Jay Clayton, made it explicitly clear that they would not be changing to definition of securities. At the time, Clayton stated, “We are not going to do any violence to the traditional definition of a security that has worked for a long time…We’ve been doing this a long time, there’s no need to change the definition.”
The SEC has every right to take this stance. However, the requests for guidance from various entities indicates that the SEC has not clearly articulated themselves.
It is baffling that at this point the SEC has not released better clarification on how digital assets are governed.
Templum was founded in 2017, and is based out of New York City. Above all, Templum specializes in offering blockchain services tailored towards digital securities. This includes platforms for both secondary markets and initial fundraising efforts.
In a past interview with Forbes, Templum cofounder, Vincent Molinari, best described what it is that Templum does. He stated, “Templum is a fintech and blockchain holding company that is focused on the modernization of securities law that intersects with the most innovative technologies. Templum will continue to create new market infrastructure in clearance, settlement, custody and transfer of digital assets as securities to create standardization, best practice, and investor protection and will allow large pools of institutional capital to enter the digital frontier market.”
PCF Capital to Host $250 milllion DSO through KoreConX
$250 million DSO
One of the largest digital security offerings, to date, has recently been announced. In an upcoming DSO, Australian based, PCF Capital, will be hosting a whopping $250 milllion event, aimed towards the mining and resource sector.
This DSO will be made possible through the use of KoreConX and their digital securities issuance platform. By choosing to use KoreConX, PCF Capital will be gaining access to the KorePartners. This is a network of strategic partnerships which KoreConX has been developing for some time.
This offering will be open to accredited investors in select countires, including the United States, Canada, Australia, and more.
In making their announcement, representatives from each, PCF Capital and KoreConX, took the time to comment on the development discussed here today. The following is what each had to say on the matter.
Liam Twigger, Managing Director at PCF Capital, stated,
“We are a global company that requires a global solution. We selected KoreConX because it will allow us to remain compliant with regulations not only in the USA and Australia but in multiple other jurisdictions around the world…This is a very important step in the history of PCF and we want to make sure our investors are protected and have a platform to be able to manage the entire lifecycle of the digital securities. That’s why we are using the best possible tools for the job.”
Oscar Jofre, CEO at KoreConX, stated,
“We are disruptors and what better way to do that than work with one of the world’s oldest sectors adopting Digital Securities for their offering. PCF Capital’s global reputation in the mining sector made the decision easy for us to bring them on as clients to our platform…Now is the time for the traditional investor to understand the value and trust of digital securities. Having a global offering of this magnitude heavily investing in a Digital Securities Offering is great for the industry as a whole. Many more will follow once the infrastructure is in place for it, and this is what we are doing with the KoreProtocol.”
PCF Capital is an investment banking group, which is headquartered in Australia. Since being founded in 1999, PCF Capital has gone on to manage over $3.5 billion in deals.
Operations are overseen by Managing Director, Liam Twigger.
KoreConX was founded in 2016, and is headquartered out of New York. Above all, KoreConX has been striving to become the most comprehensive platform for private capital markets. This means developing in-house solutions, and partnerships which facilitate needs within the digital securities sector. To date, KoreConX has begun seeing adoption of their platform, as multiple DSOs are scheduled.
Company operations are overseen by CEO, Oscar Jofre.
In Other News
I recent months, KoreConX has found themselves in our headlines on various occasions. Check out the following articles to learn a bit more about what this promising company has been up to.
Blockport STO Fails to Gain Traction – Platform to Shutdown
Failure to Launch
On a disappointing note, Blockport has announced the cancellation of their ongoing security token offering. After launching the event, roughly 1 month ago, the team has indicated that they have failed to attract their minimum threshold of investments.
This comes as a letdown to the industry, as Blockport represented one of the first security token offerings to be offered through the Tokeny platform. To date, only a handful of STOs have taken place through ANY issuance platform.
While Blockport will be returning investments to the few participants in their STO, they have indicated that this is not the end for them. Their intent is to scale back operations in the short term, reflect, and establish a path for future growth.
This means that the platform will be shutting down in the coming weeks, revering to a ‘development mode’.
Blockport CEO, Sebastiaan Lichter, elaborated on the cancellation in a statement to the public. The following is what he had to say on the matter.
“In the past few months our team has worked extremely hard to launch the first round of our STO, and yesterday this ended after being open for almost one month…In short, the results of the fundraise are not sufficient to proceed with the issuance of BPS tokens.”
Despite this, Sebastiaan Lichter remained confident in the future of blockchain. He continued,
“We still see a lot of opportunities in this industry and have built a top performing trading platform that many people love to use and which has had almost zero downtime or issues since we launched it in the summer of 2018…Whilst developing our platform, our goal is to explore opportunities that support a restart of the Blockport platform in the future.”
Operating out of Amsterdam, Blockport is a Dutch company, which was launched in 2017. Under the watch of CEO, Sebastiaan Lichter, Blockport has developed and launched a trading platform, tailored toward, both, utility and security tokens.
The security token offering, discussed here today, was launched through the Tokeny issuance platform, on March 31st, 2019.
Tokeny is a Luxembourg based company, which was launched in 2017. Above all, Tokeny acts as an issuance platform, providing companies with solutions for the tokenization of assets. Tokeny was responsible for facilitating the Blockport STO – For their part, the event went off without a hitch.
In Other News
While the failed STO is an unfortunate situation, BlockPort is by no means alone. For a variety of reasons, there have been various deals to have fallen through in the past few months. The following articles detail a couple of these situations.
BitBond Opens Bounty Program for Live Security Token Offering
BitBond, a blockchain company hosting a FINRA approved STO, has recently announced the launch of a bounty program. This program was launched in an attempt to raise market awareness of their ongoing security token offering.
This STO, scheduled to be live until early June, has seen modest success thus far, with investors contributing over €2 million to date. This puts them well on their way to raising the minimum €3 million in the event.
In an attempt to ensure the minimum €3 million threshold is met in their STO, the bounty program consists of 6 main ways in which participants can be rewarded.
- Hunter Bounty
- Referrals leading to bounty program participation
- Affiliate Bounty
- 5% commission on referrals leading to investments over €10,000
- Signature Bounty
- Token compensation for active BitcoinTalk users which advertise the STO in their signature.
- Creative Bounty
- Rewards for creative advertising in the form of memes, gifs, images, etc.
- Social Media Bounty
- Compensation for STO promotion through qualified Twitter, Facebook, LinkedIn, and Telegram accounts
- Content Bounty
- Rewards for creation of articles, and videos, which raise awareness about the BitBond STO.
A bounty program is a promotional event, aimed towards raising awareness of a fundraiser. Participants in such programs are typically compensated for promoting a company with tokens. Promotional tasks are often varied, such as writing articles, attaining referrals, reporting bugs, and so on.
While bounty programs were commonplace throughout the ICO boom, the concept is new when being applied to security token offerings. Time will tell if this promotional tool is an effective one when dealing with this new form of fund raising.
BitBond CEO, Radoslav Albrecht, commented to CrytoGlobe on the choice to host a bounty program. He stated the following.
“Since our launch in 2013 Bitbond has always worked closely with the crypto and blockchain community. This bounty program gives us the opportunity to engage further with our community, reward Bitbond early adopters and spread the news about our new groundbreaking project, the Bitbond STO.”
BitBond is a Germany based company, which was launched in 2013. Above all, BitBond utilized blockchain to facilitate financial services. This primarily includes the issuance of business loans.
Company operations are overseen by Founder and CEO, Radoslav Albrecht.
We recently detailed BitBond and their FINRA approval – a feat not achieved by scores of applicants prior to BitBond. Check out the details to this success HERE.
In Other News
Beyond BitBond utilizing the Stellar blockchain for issuing security tokens, Stellar has experienced growing levels of adoption in recent months. The following articles demonstrate various ways in which this adoption has occurred.
- PCF Capital to Host $250 milllion DSO through KoreConX May 19, 2019
- Blockport STO Fails to Gain Traction – Platform to Shutdown May 18, 2019
- BitBond Opens Bounty Program for Live Security Token Offering May 18, 2019
- Poloniex Cleans House as Tokens Delisted for Fear of Being Called Securities May 18, 2019
- Blockstream to Add Support for Digital Securities on Liquid Security Platform May 17, 2019