Prior to Prometheum you were the Founder of EquityArcade, a platform that enabled consumers to buy shares in video game startups. Can you let us know how your experience at EquityArcade transitioned over to Prometheum?

EquityArcade was a Reg CF equity crowdfunding platform that allowed consumers (investors) to invest in the future revenue generated from indie game funded on the platform. Reg CF is part of the JOBS Act, which also contains the Reg A+ crowdfunding rules. Prometheum uses Reg A+ as a means to allow the general public to invest in blockchain securities. All JOBS Act regulations relate to online equity crowdfunding. As a result, we have been able to leverage many of the experiences and lessons from EquityArcade in building Prometheum’s Reg A+ offering platform. 

Prometheum enables companies to raise capital by offering their own Smart Security Tokens (SSTs). Can you share with us how SSTs differentiate themselves from other industry standards such as STOs (Security Token Offerings) or DSOs (Digital Security Offerings)?

SSTs, STOs and DSOs are all different protocols that are attempting to solve the same problem. Until there’s complete regulatory clarity around certain critical components – including custody –  of the blockchain securities ecosystem, it’s not possible to conclude which protocol provides the best foundation.

What’s the process for a company to launch an SST?

An issuer looking to issue a SST will submit an application for an offering to Prometheum. At that point, the issuer will submit all relevant documents that will allow Prometheum to conduct the requisite due diligence in order to determine whether the company is qualified to issue an SST. Upon passing the due diligence process, the issuer will complete the Reg A+ offering circular and submit that document to the SEC for qualification. Once qualified by the SEC, the offering will be listed on Prometheum’s offering platform and begin their capital formation activities. When the stated amount of capital is raised, there will be a closing and distribution of the SST into the investors’ Prometheum brokerage account. Upon distribution of an SST, Prometheum’s issuance platform coordinates the multi-signature, multi-stage process that is used to place investors’ SSTs in either their Master or Personal Wallet. Once the distribution occurs, Prometheum will list the SST on our retail based (i.e. open to all investors) Alternative Trading System (ATS), and secondary market trading will begin in the issuer’s SST. 

What type of fees should companies expect from launching an SST and hosting it on your platform?

Our goal is to allow companies to raise up to $50m in the most efficient way possible:  faster, less expensive, and easier than any other legal capital raising method. In terms of direct fees, we plan on charging issuers a small percentage of the total amount they raise (1-3% dependent on the total raised).  Once a token has been distributed and is trading on the ATS, companies are charged a quarterly membership fee of $2,500 for maintaining their order book.

Indirect fees not charged by Prometheum can vary and are related to legal and prep for the creation of the Reg A documents, accounting, auditing, marketing, and other possible professional services.  

SST will be Reg A+ issued. For investors who are not familiar with this legislation and what does it mean? Could you explain the benefits?

Regulation A+ allows issuers to raise up to $50 million from the general public annually, and such securities, when issued, are freely tradeable on a secondary market. Reg A+ is really the perfect regulation for issuing blockchain securities as it meets the spirit that was initially conceived by the crypto community- it allows the general public to invest, and the asset is freely tradeable upon distribution but in a regulated manner (unlike many historical token investments). 

Tokens that are created on your platform will then be tradeable on a custom ATS (Alternative Trading System). Could you elaborate on how your ATS will operate?

On the surface, the ATS operates just like a traditional equities electronic market.  Every token has as order book representing supply and demand for that token – bids (what buyers are willing to pay, and the number of tokens they want) and asks (offers to sell, or what sellers are willing to sell for, and the number of tokens they want to sell). This order book is managed by the matching engine which uses an algorithm to arrange the bids and asks into a price, upon the price quote the engine then utilizes time priority, and ultimately “matches” buyers and sellers when they meet at the same price.  There is an online trading platform, similar to Etrade or Schwabb, which allows traders and investors to see the order book, look at charts, enter orders and see their account status and previous transactions. Through the use of omnibus accounts, other broker-dealers will be able to offer their customers access to SSTs. Our ATS intends to operate 2 sessions everyday, both 11 ½ hours long with two 30 minute breaks for settlement. When there is an executed trade, meaning an order between a buyer and seller is matched, the trade is written to the blockchain, as well as recorded to a database to ensure compliance with traditional record keeping.  

Are SST tokens launched on your platform tradeable on regular security token trading exchanges such as OpenFinance and tZERO?

SSTs are compatible with Prometheum’s ATS and work as both securities and utility tokens in the Prometheum ecosystem. It may be possible for SST issuers to create a bridge to other exchanges or blockchains by building smart contracts on the Prometheum Utility Blockchain. As the equivalent of a national market system for digital assets develops it will likely be necessary for digital assets to have the ability to trade across security token exchanges and alternative trading systems. 

What are Ember (MBR) tokens and what role do they play in this project?

The Ember SST fuels all SST transactions and allows holders to provide services at the protocol and application layers. Prometheum’s Ember token has both profit-making utility (work/access) and proprietary payment currency features. Ember provides the fuel for the Prometheum blockchain Network and demonstrates the versatility and value provided by a modern approach to using securities to transfer value in a decentralized, blockchain based environment. Ember is the first SST issued on the Prometheum Blockchain and sets the legal and technical precedent for further SSTs.

It seems like you are building everything from scratch, why not use an existing blockchain?

The Prometheum blockchain is required in order to ensure that regulatory requirements are met while also providing a viable method for the use of blockchain securities as utility tokens. This includes direct interaction with distributed applications as well as processes for moving blockchain securities in and out of brokerage accounts when a user wishes to trade them on the Prometheum ATS.

Is there anything else that you would like to tell us about Prometheum?

Prometheum is creating the market infrastructure needed for digital assets to go mainstream. When the SEC essentially declared that tokens were securities in the 2017 DAO report, such infrastructure didn’t exist, which meant that there were no compliant facilities for the issuance, trading, clearing, settlement and custody of token securities. Prometheum sought to fill that void and is creating the infrastructure that will allow the general public to invest and trade in digital assets, while also providing mechanisms for clearance, settlement and custody after trades are made. The Prometheum Network is meant to allow the general public to participate, which is required in order for digital assets to go from a new asset class to a mainstream asset class. 

To learn more visit Prometheum.

Multi-STO Platform

Today, a pair of Luxembourg based companies, Black Manta Capital and Tokeny, have announced the launch of a ‘multi-sto platform’.

This move represents the first licensed offering of its kind. The licensure needed to make the endeavour possible was awarded to Black Manta in early 2019, by the European regulatory body, BaFin.

BaFin Approves Germany based STO Platform by Black Manta Capital

The upcoming platform will operate with each company bringing unique skills to the table. They indicate that each will work within the following roles.

Black Manta

• Compliance adherence
• Investor Protection

Tokeny

• Tech provider through a white-label tokenization platform

The Finer Points

The platform, itself, is geared towards serving not only professionals, but retail investors alike, with Europe representing the target market.

STOs, to be held through the platform, look to provide access to a variety of tokens based, not only on equity, but debt instruments and fractionalized ownership, as well.

For interested parties, investor onboarding is expected to begin in early November, 2019.

T-REX

The companies indicate that the launch of this platform will be facilitated through the adoption and use of framework known as the ‘Token for Regulated Exchanges’ or ‘TREX’.

The TREX framework provides a variety of capabilities including, but not limited to, the following.

• Identity Management Systems
• Validation Certificates
• Transfer Management

Tokeny Releases TREX – The First Public Framework for STOs

Commentary

Upon announcing the launch of this new platform, representatives from each, Tokeny and Black Manta Capital, took the time to comment. The following is what each had to say on the development.

Luc Falempin, CEO of Tokeny, stated,

“Working with Black Manta Capital Partners allows the both of us to focus on what we do best. We provide the institutional grade tokenization solutions for every BMCP offering and this allows them to focus on what they do best, which is building their investor community.”

Christian Platzer, Co-Founder of BMCP, stated,

“Tokeny Solutions is one of the top global technology providers in tokenization. Having worked closely with the Tokeny Solutions team for several months, we can say: we speak the same language when it comes to the prospects for our industry and together we could not be more positive about the opportunities for security tokenization in Europe and around the world.”

Speaking with Luc

We were fortunate to have recently completed an exclusive interview with the CEO of Tokeny, Luc Falempin. In this discussion we learn more about, not only Falempin himself, but the near and long term goals of Tokeny as a whole.

Interview Series – Luc Falempin, CEO of Tokeny

Black Manta Capital

Operating out of Luxembourg, Black Manta Capital is a young company which was founded in 2018. Operating under licensure received by BaFin, Black Manta is working to establish themselves as an authority in the digital securities sector.

Managing Partners, Alexander Rapatz and Christian Platzer, currently oversee company operations.

Tokeny

Operating out of Luxembourg, Tokeny is a Fintech company which was launched in 2017. Above all, the team at Tokeny is working diligently to develop a suite of services meant to serve the digital securities sector.

CEO, Luc Falempin, currently oversees company operations.

In Other News

While both, Tokeny and Black Manta, have been hard at work in recent months to establish, not only themselves, but the digital securities sector as a whole, it was Black Manta that most recently caught our attention. This was through their recently announced partnership, which will see Canadian based DigiMax enter European markets through licensure held by Black Manta.

DigiMax Eyes European Expansion through Black Manta Partnership

Swarm Capital

Swarm, a U.S. based service provider for the digital securities sector, has just announced the launch of ‘Swarm Capital’.

Swarm Capital, which is built upon the Swarm Protocol, is described as a modular platform which ‘puts the full power of digital securities on the blockchain into the hands of issuers and service firms’.

The company indicates that while Swarm Network continues to be a non-profit, Swarm Capital will look to offer more comprehensive and premium services. Swarm Capital will continue to make use of various Swarm solutions, such as their specialized SRC-20 standard, as well as their Market Access Protocol.

EarlyBird

Swarm Capital indicates that the first product to be launched through the service will be known as ‘EarlyBird’.

Despite just being launched, this product has already seen industry adoption by multiple companies. The product works to provide its users (potential token issuers) with a look at market interest in their potential offering, before a token generation event is undertaken.

Commentary

In their announcement, the Swarm team took the time to elaborate on the need for a platform such as Swam Capital. The following is what they had to say on the matter.

“As SWARM has been delivering on its promise to build an open source protocol while operating as a non-profit, we have consistently seen demand from issuers and other market participants for a service layer that would conveniently allow them to interact with the protocol layer. There has also been an obvious need for seamless integrations with other tools required within the digital security value chain. We realized that the best way to meet customers is with a dedicated entity that can demonstrate the power and flexibility of the SWARM Protocol, as well as enable its customers to use it as a foundation for building their businesses. For us, this is the natural next step to creating adoption for digital securities.”

Swarm

Launched in 2018, Swarm is a U.S. based company which specializes in asset tokenization. Their efforts have resulted in the formation of various partnerships and developed technologies. To date, Swarm remains one of the few platforms to successfully assist in multiple STOs/DSOs.

Cofounders, Philipp Pieper and Timo Lehes, currently oversee company operations.

In Other News

While we have covered Swarm on various occasions, one of our most recent articles touched on the launch of Swarm 2.0. The following article looks at this, the company as a whole, and their ongoing mission.

Swarm 2.0 Goes Live –Swarm Facts