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.
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.
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 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 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 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 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 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.
AssetBlock Tokenizes $60 Million Real Estate Fund
This week has seen some dramatic events take place in the blockchain real estate sector. Notably, AssetBlock announced the tokenization of $60 million in real estate funds. The news demonstrates the further expansion of blockchain technology into the traditional real estate market, and AssetBlock’s desire to become a major player in the sector.
News first broke of the tokenization on September 17 via a BusinessWire press release. In the post, AssetBlock sheds some light on the strategies in place and how the company plans to disrupt the traditional markets.
AssetBlock Utilizes Algorand Blockchain
Uniquely, AssetBlock chose to tokenize the properties on the Proof-of-Stake blockchain – Algorand. The Algorand blockchain brings some interesting benefits to the table including compliance, global reach, and a strong team of experienced experts.
As such, the Algorand blockchain is built to be sustainable and governed by open operating standards. Another important point worth mentioning is that Algorand blocks finalize in seconds. In essence, this strategy makes it possible for investor participation globally and instantly.
As a Proof-of-Stake blockchain, the energy consumption is far less than a Proof-of-Work (PoW) blockchain such as Bitcoin. Algorand uses a proprietary version of PoS dubbed Pure Proof of Stake (PPoS). This protocol provides full participation while leaving users protected at all times. The system is able to achieve consensus without the need for a central authority making truly decentralized.
Lodging Capital Partners LCP
To make this advantageous maneuver, AssetBlock enlisted Lodging Capital Partners (LCP). LCP currently holds over $1.5 billion in international real estate. For their part, LCP provided the properties to be tokenized.
In this particular instance, AssetBlock chose to tokenize $60 million in luxury hotel properties. According to company executives, these properties are only available to blockchain investors.
AssetBlock – More Opportunities
Speaking on the decision, AssetBlock CEO, Mike Lidell touched on the importance of merging traditional and non-traditional investors in an efficient manner. He explained that this is the best way to create more opportunities for everyone in the market.
Additionally, Steve Kisielica, the Principal CIO of LCP described how the maneuver creates a new investment pool in the market. He also spoke on the responsibility companies have in terms of embracing new technology that simplifies the market.
AssetBlock officials are serious about getting these tokens out to investors. The company officially earmarked the token launch for mid-October.
Real Estate is Growing Digital
The company’s decision mirrors that of some of the biggest players in the game in some aspects. Just this week, Securities reported on Harbor tokenizing $100 million in real estate funds for much of the same reason.
You have to give it to AssetBlock for it’s out of the box thinking. Utilizing a Proof-of-Stake blockchain is a great way to avoid future issues related to energy consumption. You can expect this deal to boost the notoriety of all the firms involved, as well as the possibilities of using PoS blockchains for tokenized real estate.
TokenMarket Streamlining to Focus on Digital Securities
Today it was announced that PayRue has acquired a cryptocurrency exchange, developed by TokenMarket.
With PayRue already holding the appropriate licensing in Estonia to launch an exchange, it is expected that the service will go live sooner than later.
This move goes beyond simply taking control of a cryptocurrency exchange, however. The acquisition is part of a larger partnership which will see the pair of companies work to ensure future integration of services throughout their platforms. The companies state that this integration will benefit their client base, currently numbering over 200,000 and growing.
This acquisition caught our attention, specifically, due to the reasoning behind it. On the part of TokenMarket, this move was undertaken with the intent to focus their efforts more completely on the advancement of the digital securities sector.
Over the past few months, TokenMarket, has made it clear that this is where they believe the future lies, and are hitching themselves to the wagon. Whether undergoing their own STO, or working to develop services and obtain appropriate licensures, they are quickly setting themselves up to be a leader in the space.
Upon announcing the acquisition and re-focusing efforts discussed here today, representatives from each, PayRue and TokenMarket, took the time to comment. The following is what the CEO of each company had to say on the matter.
Mikael Olofsson, CEO of PayRue, stated,
“Working with TokenMarket on a cryptocurrency trading platform is an exciting development for PayRue. Some may see the exchange market as crowded, but our view is that regulated decentralised exchanges are the next evolution and very few companies are prepared for this. We believe that our users will benefit from the security and transparency that centralised exchanges are currently failing to deliver, as showcased with the continuous hacks and fake trading volume”
Ransu Salovaara, CEO at TokenMarket, stated,
“We are excited to work with PayRue as we believe there will be a monumental shift to regulated wallets and exchanges. This partnership allows us to put all our focus on token issuance and the tokenised securities market, which we expect will be a billion dollar business in the coming years.”
Speaking with Mikko
We recently had the pleasure of completing an exclusive interview with the Chief Technology Officer of TokenMarket – Mikko Ohtamaa. In this interview, Mikko, discusses, not only his own foray into blockchain, but the future of TokenMarket within the industry.
Founded in 2017, TokenMarket is a crowdfunding platform based out of Gibraltar. Their efforts are focused on the development of the digital securities sector, through the use of blockchain technologies. To date, TokenMarket has assisted various companies’ complete successful token sales. This includes Storj, Ethos, and more.
CEO, Ransu Salovaara, currently oversees company operations.
Operating out of London, England, PayRue is a tech company which offers services surrounding cryptocurrencies. This includes a mobile payment app, along with the acquired capabilities discussed here today.
CEO, Mikael Olofsson, currently oversees company operations.
In Other News
To date, we have detailed developments pertaining to TokenMarket on various occasions. The following articles elaborate on a few of their developments from the past year.
WORBLI Looks to Make STOs More Affordable
This week, the World Blockchain Initiative – WORBLI – announced plans to revolutionize the STO sector. To accomplish this monumental task, the firm plans to create the world’s most cost-effective and pro-developer blockchain ecosystem to date. The news signals a key shift in strategy by smaller firms, as well as, a continued interest by companies seeking a blockchain-based IPO alternative.
World Blockchain Initiative WORBLI
The WORBLI platform is an STO ecosystem which allows businesses to share in the firm’s extensive library of decentralized apps (Dapps) without the need to hire custom developers. Think of WORBLI as kind of like a blockchain a la carte. In this manner, users can pick exactly what services they require and integrate these services without creating a large workload.
According to WORBLI executives, the platform’s design enables endless possibilities for future developers. For example, a client can add GEO Fencing to their security token. This feature ensures that the token never is sold outside the compliance region.
Identity-based Financial Tiers
Another cool feature is the ability to utilize identity-based financial tiers. You can compartmentalize your STO and only allow certain investors the ability to participate in particular investments. This feature allows firms to better market services to accredited-investors without cutting out smaller contributors.
WORBLI Works on Any Blockchain
Perhaps the most impressive feature of the WORBLI platform is that it can function on any blockchain. Allowing users to choose their favorite blockchain is a smart way to facilitate market integration, and gain trust from users.
In a recent post, WORBLI developers spoke on the rising costs associated with traditional IPOs. Notably, the company pointed out that soon, only mega-corporations will have the capital to host one. To add to the point, developers also spoke on the recent closures of numerous blockchain firms after the institution of more expensive regulatory framework derailed their budgets.
However, one of the most interesting points covered in the post was the fact that these costs also stifle innovation. This innovation is critical for the development of the digital economy. This is why WARBLI set out to create a platform that delivers STO services at an affordable rate in the first place.
WARBLI Network Expands
Most recently, WORLI made headlines after partnering with a blockchain-based digital content timestamp platform called WordProof. WordProof allows content creators to prove ownership of their creations easily and with the validity of the blockchain.
Another noteworthy partnership WORBLI made is with EDNA. EDNA is a DNA firm that seeks to bring more transparency to the DNA market. Currently, DNA firms have little accountability. This lack of transparency has led to a rise in public concern about the use of their DNA after the testing ends.
WORBLI Has a Smart Strategy
WORBLI seems to have a new approach to the STO market. The fact that users can utilize their favorite blockchain could be a big draw for businesses familiar with cryptocurrencies. For now, the firm looks to become a major force in the space.