Security Token News
The Best Countries to Launch Your Security Token
Security token offerings (STOs) are now commonplace in the cryptomarket. This unique fundraising strategy gives companies the ability to easily monitor, distribute, and regulate their campaign utilizing blockchain technology. STOs combine the best features of ICOs with the stringent regulations found in particular markets.
Aside from the benefits achieved by companies that use an STO strategy, there are also many reasons why an investor would seek out this type of investment. For one, STOs are far more transparent than an ICO. Companies involved in STOs must reveal sensitive company information including their address, upper management, and financials.
This information further protects investors from the ramped scamming that occurs in the ICO markets. One report published by the Statis Group showed that as much as 80-percent of the ICOs conducted in 2017 turned out to be scams. It’s exactly this fraudulent activity that led to the development of security tokens.
Now that security tokens are more popular, many countries want to host STO related businesses. In order to entice these businesses onto their shores, government officials are ready to make some serious concessions. Below are the best countries to launch your security token.
Malta
The island country of Malta is one of the premier locations to launch your security token. The country embraced blockchain technology from the start. The Maltese Prime Minister, Joseph Muscat, issued a public statement this year in which he acknowledged both the fears of regulators “and the fact” that this technology is quickly changing industries across the globe.
Malta via Master Explorer
Maltese officials are serious about their desire to be the leading blockchain country in the world. In the same statement, the Prime Minister stressed the importance of heading the digitization of the economy. He went as far as to state – “we must be the one that others copy.”
Malta is home to some of the largest security token projects currently in the works. In September the Malta Stock Exchange (MSX) announced a partnership with Binance, the world largest exchange by volume. Binance seeks to create a new security token platform in the country in the coming months.
Lithuania
Lithuania made some significant headway last year towards their goal of becoming EU’s security token capital. The country introduced security token friendly regulations. The country’s Minister of Finance issued broad security token regulations that covered the taxation, accounting, issuance, and compliance.
Blockchain companies send their project to a supervisor of financial markets and their office well send back a reply regarding the status of your token. Basically, Lithuanian officials do their version of the Howie Test to your project and give you a solid answer prior to your firm moving forward on their project.
Since Lithuania is a member of the EU, they gained a huge advantage by legalizing and regulating STOs in their country. Government officials hope to entice all of the EU to host their STOs in the country.
Switzerland
Switzerland has a long history as a financial safe haven. The country features low taxes and a crypto friendly environment. Switzerland was one of the first countries to adopt cryptocurrency regulations.
Switzerland has had a pro-crypto stance since 2014 when regulators released a report detailing the significance of cryptocurrencies. Interestingly, the report acknowledged cryptocurrencies handle the same tasks as money but stopped sort of labeling it legal tender due to the lack of an issuing country.
STOs submit their project to the Swiss Financial Market Supervisory Authority (FINMA). This regulatory body reviews each STO to confirm what designation the project falls under. Token labels include payment, utility, asset, and hybrid tokens.
Israel
Israel is home to numerous blockchain-based startups. The country leads the world in research & development according to a recent Bloomberg report. The report placed Israel in the number two spot, only behind South Korea in terms of innovators. Israel welcomed blockchain companies by cutting crypto taxes in half in October of this year.
According to a Cryptoslate report, Israel started 2018 with 88 blockchain startup in operation. In March 2018, Israel released an interim report which detailed the regulations for ICOs. The report was intended to strike a “balance between technological innovation and the protection of investors.”
The Israel Security Authority’s ex-head, Prof. Shmuel Hauser went as far as to recommend the country foster the creation of an international blockchain center on his retirement. This move ensures Israel remains a dominant force in the cryptomarket.
Canada
Canada continues to lead the North American crypto revolution. The Canadian Securities Exchange (CSE) announced in February plans to launch a new securities token platform. The platform is based on the Ethereum Blockchain.
Toronto, Canada is the birthplace of Ethereum and the city continues to be a strong hub for crypto activity. Additionally, the platform allows users to launch their own security token easily. This decision is consistent with Toronto’s desire to be an industry leader.
According to the press release, the new security token platform is designed to give companies an alternative to the ICO space. Kabuni Technologies is the first security token scheduled for launch on the platform. The company also filed a prospectus with the British Columbia Securities Commission (BSCE).
Dubai
Dubai remains a powerful influence in the cryptomarket. The country was one of the first to issue a state-backed cryptocurrency back in October 2017. In February of this year, The Dubai Multi Commodities Centre (DMCC) began to facilitate a market in cryptocurrencies.
The DMCC is a member of the Global Blockchain Council. The project initially began as part of the Dubai Smart City initiative. Speaking on cryptocurrencies, the project’s director, Franco Bosoni, discussed how he could see a commodities-like future for these digital assets. Dubai is now in the middle of developing a robust framework for the security token commodity to operate within.
Security Tokens – A Smart Move
The countries exemplify the innovative spirit and their decision to position their markets in line with the digitization of the economy is sure to pay off. The security token market continues to expand and these countries are now seeing the benefits of their pro crypto stance. You should expect more countries months.
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.
Global Response
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.
Full Compliance
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 via Homepage
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 Finance
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.
Maximizing leverage
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.
Collaboration
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.
Commentary
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
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.
Entoro
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.
DigiMax Designated ‘Exempt Market Dealer’ by OSC
DigiMax to Consult During Leonovus Security Token Offering
Entoro to Act as Placement Agent in Upcoming Leonovus ‘Galaxa’ STO
Entoro Eyes Secondary Markets Through Partnership with Unicorn
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.
True Suspicions
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.
Market Response
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.
Presidential Musings
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.
Satisfaction
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.