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Many have deemed 2019 as the year that security token offerings (STOs) will come to fruition. Regulators are finally opening up to the idea of blockchain technology and, with some persuasion still needed, tokenising equity and debt. The advent of a brand new technology and a way for investors to gain early-stage access to cutting edge startups has had mixed reviews.
Ultimately, however, there is still much work to do. Businesses, investors and much of the wider world needs to understand just what it means for investors and businesses alike. Here we take a look at the reasons why 2019 is about setting the STO model up to succeed instead of rushing the process.
Initial coin offerings (ICOs) ushered in a new wave of investment opportunities for many people around the globe. According to statistics from ICO Data, 1255 projects raised just over $7.8 billion USD in 2018 alone. For many, ICOs were a way in which they could invest in the next generation of disruptive tech startups at the very beginning. They created a community spirit for projects and, in doing so, had many people excited at the prospect of being a part of a growing business.
Whilst ICOs opened the floodgates for many businesses and investors, they also brought with them a whole host of trouble. In July 2018, a report by Satis Group, a New York-based STO firm, had them come to the conclusion that over 80% of ICO projects were in fact scams. This, for good reason, did not sit well with regulators like the Securities and Exchange Commission (SEC).
Although STOs are, of course, completely different from the ICO framework and are in fact securities, not utilities, for many they do not see it that way. In February 2018 Jay Clayton, Chairman of the SEC, infamously said: “Every ICO I have seen is a security”. Whilst his attitudes to the ICO framework may have changed as the year went on, it did not take away from his original message; ICOs, whilst beneficial for businesses raising capital, must stick to the securities law.
The SEC was not the only regulator wary of the new investment tool, China, another global superpower, also famously banned ICOs and cryptocurrency completely. Part of this reason will be to protect investors but, by tarring all ICOs with the same brush, ultimately it hindered those trying to get ahead.
STOs have the option to rectify a lot of the shortfalls that ICOs have. Further regulation, a heavily vetted process for the business to go through and backed by equity or debt, STOs ultimately give a well-needed legitimacy that the ICO market could not for many traditional finance investors. Being backed by a traditional asset, but in a tokenised format on an immutable database to us, makes sense.
However, capital markets are notoriously slow to enact change and, for the regulators, it can be slower. Time is a key element to ensuring that STOs become a success but, more importantly, regulators taking time to understand how the technology works are also vital.
For the regulators, and for much of the investment world, in order to become more accustomed and more understanding of the STO model, they simply need more time. Whilst these tokenised securities are backed by real assets, in traditional markets and placed under strict laws, the change will not happen overnight.
With Facebook’s recent announcement that the Libra Association had used a security token sale to give its early investors a dividend payout, the odds of adoption of the STO framework are looking favourable. As more businesses, new investors and traditional investors begin to understand the STO framework, then more people will begin to trust it. As that trust grows, so will investor attitude and the business that look to use the security token offering structure. Time waits for no man but, in this case, it might just have to.
Convincing an estimated $68.179 trillion USD market with over 400 years of history to suddenly start buying into the world blockchain and tokens is going to need some serious convincing, as well as time. Just like any new piece of technology coming to the traditional financial market, there needs to be some proof that it works.
Blockchain has already completed half of this task and now major corporations around the globe are beginning to understand just how beneficial it can be. American Express, the Industrial and Commercial Bank of China, Walmart and even Apple are now beginning to look into the various ways which blockchain can help them with their business. HSBC reportedly used distributed ledger technology to settle over $250 billion USD of transactions in 2018 alone. These corporations are finally catching up in terms of development and using a truly revolutionary piece of technology. The same cannot be said for tokens, however.
Tokens, tokenising and tokenisation are three words that scare investors and venture capital (VC) firms. For some, tokens are something that they do not yet see the need to understand. For others, tokens represent all ICOs and they do not want to be involved at all. Whilst STOs are looking to change that viewpoint and stance, there will need to be some genuine use cases for STOs in order for them to work.
For many early-stage businesses, holding an initial public offering (IPO) is simply something that takes too long. It also means many rounds of funding before the IPO in which more equity is given away, something they may not want to do. The STO offers an alternative to traditional models of financing, something which means earlier stage access to the next generation of businesses. “Why not just use crowdfunding?” is also something that many investors will be thinking, however, they need to understand the benefits of tokenisation first; earlier liquidity, 24/7 trading, complete transparency and a public record of all transactions to name a few.
In order for more investors to begin to understand the world of tokenisation, they will need to see successful use cases. ICOs, whilst revolutionary in their approach, also alienated a lot of traditional finance in their approach. The STO will be able to validate and rectify a lot of the early mistakes that the ICO market experienced. However, in order to persuade investors that this framework is truly revolutionary, there need to be success stories first.
With traditional securities, investors know what they are getting. Whilst security tokens are merely tokenised shares, the thinking of classic investors is yet to differentiate: its a token, therefore its an ICO, therefore it’s a scam. It will require legitimate projects as well as exciting opportunities to present themselves using the STO framework which investors can then trust.
New technologies take time to receive adoption. It takes several use cases as well as multiple success stories for new technology to become a part of the main market. Disney only stopped issuing paper shares in 2013, after 56 years of issuing the stock certificates, with many other publically traded companies now following suit. Primary trading markets are not known for keeping up with technology and it is very much a “stick with what you know” mentality.
Ultimately, if one large investor looks into a STO, it could have a butterfly effect. Should Goldman Sachs, Morgan Stanley or Blackrock invest in a tokenised offering, then the rest will follow suit. It will just take one major investment bank to do so in order to create a ripple and, ultimately, a lot of trust from a traditional investment platform.
Trust is one of the biggest things needed if the STO market is to truly become a success. It is going to take time in order to build that trust and, more importantly, it is also going to take successful STO projects to come out of this new financing framework. The ICO market saw quite a lot of people have their fingers burned and, whilst the STO framework will change this, it is going to take people time to trust tokens again.
2020 has the potential to truly change the future of financial models if the security token offering market is a success. 2019 is about ensuring that attitudes towards the technology of tokenised securities are changed for the better. Fundamentally, this means having legitimate projects succeed in this emerging market.
More importantly, however, it’s about ensuring that the traditional markets feel that the technology of tokens is a viable method in which they can invest. Security token offerings have the capability to revolutionise the stock market. 2019 is simply about ensuring that they have the right foundations on which to build a lasting legacy.
Facebook and its partners have recently launched the Libra Association, marking the largest security token sale in history. Take a look at just what this means for the world of blockchain and digital assets.
On Tuesday 18th June, Facebook, along with 28 partners from diverse industries, unveiled plans to launch Libra: a new currency and payment mechanism based on blockchain technology. Described as “a simple global currency and financial infrastructure that empowers billions of people,” Facebook, as well as its partners, is bringing cryptocurrency to almost a quarter of the planet.
The news has been met with both celebration and some angst in both crypto community and traditional markets, with commentary alternating between anticipation at broader adoption of digital assets and fears over the privatization of money.
In all of the excitement, many have missed the fact Libra has chosen to raise its funding for its foundation by issuing a security token, or the “Libra Investment Token (LIT)”, as they call it. With the Libra Association receiving over $200 million dollars, this issuance represents a meaningful step in the institutional adoption of security tokens.
A not-for-profit organization based in Switzerland, the Libra Association, will have various layers of governance, compliance, privacy and data storage in order to ensure the protection of all members and investors. The most powerful of these is a council, similar to that of traditional shareholders.
“The council delegates many of its executive powers to the association’s management but retains authority to override delegated decisions and keep key decisions to itself, with the most important ones requiring a greater than two-thirds supermajority,” in a statement released on the Libra Association’s website.
In order to become a member, there are certain criteria which have to be met to be accepted. A business must be on the list such as the Fortune 500, S&P Global 1200 or FTSE EU30. Businesses must purchase a minimum of $10 million Libra Investment Tokens (LIT), and each $10 million invested gives the member one vote in the council.
Of course, investing this $10 million in security tokens does not go unrewarded. The Libra Association members will have access to the Libra Reserve when it is fully operational. This will mean that once the expenses of the association have been covered these investors will receive a dividend via the Libra Investment Token (LIT) for their early stage contribution. Much the same as a dividend stock but in a tokenised form, Facebook and the Libra Association will be setting up arguably the largest security token to date.
Mastercard, Andreessen Horowitz, eBay, Uber and Spotify all make up some of the original 28 partners, with the foundation receiving over $200 million thus far. However, there is expected to be no limit on the number of partners who wish to sign. By creating the Libra Foundation, Facebook and its members hope to regulate the underlying Libra currency. In a quote from the association’s page, it states that Libra members will play additional roles in order to achieve success.
“In these early years of the Libra network, there are additional roles that need to be performed by the association: … the raising of funds from the members as well as other investors through the sale of Libra Investment Tokens (a token that grants rights to a share of the future interest accumulated in the Libra Reserve.”
By doing so, Facebook has not only shown 28 of these behemoth businesses that the STO model can work, but it also opens up the possibility of more STOs coming to fruition of the back of Libra’s success. In short, Facebook has just signed some of the largest global corporations up to the security token model.
Significant Progress towards Mass Adoption
Libra’s decision to fund the Libra Foundation with a security token is an excellent development for the space.
As it stands, the LIT will become one of the most successful security tokens to date. And with no cut-off point for members joining, there is no limit to how many more LITs could be sold. In doing so, Libra is introducing a wide variety of very successful businesses to security tokens and the blockchain-based infrastructure.
Now that some of the largest brands and names in the world have “dipped their toe in the water”, we believe many businesses will follow suit. Libra will be a very successful showcase for the security token framework, which in turn will highlight their efficiencies and benefits.
For us at TokenMarket, it marks an extremely exciting time. Having been passionately involved in the STO space for a long time, we look forward to Libra complementing our efforts to promote security tokens. The Libra Association may not know it, but they’ve just verified the possibility of a simple idea transforming into a multibillion-dollar industry. We for one, are excited to be a part of it.
The BattlefieldFC token sale will take place in three rounds. 400 million tokens are scheduled for sale during the first round, Presale 1. 100 million tokens are allocated for Presale 2, and 100 million tokens for the final sale round. The remainder of the generated tokens will be reserved for the Foundation’s endowment for later use. BattlefieldFC will pursue a strategy to continuously expand operations, business development and R&D to create a technology platform that supports the sports industry and a healthy culture for sports.
Presale fundraising will be to support the development and operations of the business before the main network launches. The token sale allows for an initial 33% of the total token supply to circulate in the market with a vesting period of five months for all three stages of token sale.
BattlefieldFC has strategically allocated tokens for wider distribution following the network launch, and tokens will be restricted until then by the lockup period (vesting period).
At the time on network launch, the tokens will be distributed to token sale participants, and those reserved for the Foundation will be allocated in the following way, totaling 1.8 billion tokens.
600 million for token sale participants
250 million for continuing technology development and operations
50 million for marketing
300 million for strategic partners
100 million for BattlefieldFC user rewards
500 million for team, founders, advisors and seed round investors
Battlefield FC starts the second chapter with the start of Wanderlei Silva the legend of MMA, promoted as the honorary ambassador of Battlefield FC.
Battlefield FC, established by Lee Yong-woo, a former martial arts player, held his first competition at the 2017 Olympic Park Olympic Hall. ONE Championship middleweight champion Igor Savrid, and early strike force bantamweight champion Sarah Kuffman. Ben Henderson, who is based in the UFC and Bellatore in Korea, and Chris Bisog, a “warrior”, has also been a public relations ambassador.
Battlefield FC will host Battlefield FC’s second tournament in July at Macao and the formal mixed martial artist Silva will play a major role as a Battlefield FC public relations ambassador.
Lee Yong-woo, the founder, said in an interview with SpoTV News on April 12, “the second battlefield competition will take place on July 27th in Macao.” 2019 Battlefield FC will take place in Sheraton Grand Macao Hotel Cotai Central Kashgar Grand Ballroom. Battlefield FC’s first competition was held on March 18, 2017 at the Seoul Olympic Hall hence bringing more excitement to the Macao Match. Lee Yong-woo, the founder of Battlefield FC, was determined to make Battlefield FC an international martial arts competition. “I want to change the paradigm of the existing mixed martial arts sports industry to an innovative structure,” he said with determination.
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In the not-so-distant past, ICOs enjoyed a massive surge in popularity. Yet, because of a number of documented ICO scams and security breaches, the bullish ICO market has petered-out a bit. That said, Security Token Offerings (STOs) have emerged as a new method of raising money for blockchain projects. STOs have the potential to meet the growing demand for both compliance and accountability. In this article, 9 industry experts provide valuable insight as to whether STOs are the new ICO.
Security tokens have the potential to outperform ICOs
“Investors should definitely take note of the fact that security tokens are eating Wall Street. This is for a lot of reasons. While cryptocurrency markets have struggled to regain the momentum following the bear market of 2018, interest in blockchain technology is alive and well. And at the top of the funding food chain, venture capitalists are returning to the crypto markets armed with a new weapon: the security token. Since security tokens are primarily concerned with the ownership of a tangible asset and are purchased based on their potential to appreciate in value, pay dividends, etc., the more this provides a measure of stability and value, VC’s can and will, I predict confidently return to crypto trading in 2019. This on its own indicates the trend that STOs are pretty much the next source of fundraising fire in our innovation ecosystem. It’s also estimated that STO’s will attract more institutional investors than ICO’s did. Many new investors will turn to security token markets to gain exposure to securities, bridging the gap between two investor worlds. Various offerings can be made using this technology: real estate, stocks, art and more. This also applies to tokenizing existing securities. Security tokens have the potential to outperform ICOs in the next 5 years.”
“STOs will not replace ICOs because they are applicable for a totally different type of companies. An ICO by nature makes sense when the company works on a blockchain related product where a native token can be integrated. An STO, in contrast, is a general method of Fundraising and hence applies for every startup. Choosing the ICO as a blockchain startup can save a lot of Compliance effort, hence ICOs will still exist, but to a smaller extent.”
“STOs and ICOs are simply marketing terms for the same thing. Securities laws have always applied to this type of raises and calling it an STO instead of ICO doesn’t change anything. Those are not legal terms, but PR terms and the community has shifted to saying STO is a way to attempt to signify securities compliance and increase investment interest.”
(Photo Credit: www.thetokenist.io)
STOs Will Gradually Take Over
“I have been an investment adviser and financial planner since 1992, and only recently forayed into cryptocurrency a few years ago (as it is a very young field).
Seeing that there were hundreds, if not thousands, of ICO’s which were all fluff and hot air, I adapted my old stock-market checklist to hunt for quality ICO’s. Fortunately, we found a few.
After sharing the 4-point C.O.I.N. ICO selection criteria with hundreds of friends and associates, many now had increased knowledge but were still time-poor, and wanted someone to do the investing for them.
This is why we created the first crypto ETF, the ‘BostonCoin’. Investors purchased the BostonCoin, and funds were used to invest into 30-50 of the best quality ICO’s. At the time, the term ‘STO’ was not in use. Borrowing terms from the stock market, we called ourselves a ‘crypto-ETF’, or referred to BostonCoin as ‘the coin of coins’.
As many ICO’s are, or have turned out to be, a kind of GoFundMe for dreamers, we believe that STO’s are the way of the future.
Since we started BostonCoin, we have also become aware of other security backed tokens, such as ‘PropertyCoin’, which we like.
We believe there will be limited room for ICO’s and dreamers in the future (just as there is limited room for speculative stocks in the NASDAQ); STOs will gradually take over, as investors like to see some kind of fundamental asset-backing for their money.
In a worldwide downturn, investors will still receive *some* funds back, even if a corporation goes bankrupt (assets held will be sold, and perhaps give a return of a few cents in the dollar). We believe that increasing numbers of investors will be reassured in the crypto space when there is
some form of asset-backing, not just smoke and mirrors or hot air.”
“I run a directory for ICO and STO marketing agencies with Bruno Skvorc, so we got some stats you might be interested in. We got stats about the search volume of ICO vs. STO keywords, which aren’t even showing on keyword research tools yet (STOs are still a new thing, so the data isn’t available on public tools).
According to our data, ‘ICO marketing agency’ actually gets much more searches than ‘STO marketing agency.’ ICOs aren’t dead yet, but there’s no doubt that STOs are growing in popularity.
As for the marketing budget of ICOs – they’ve gone down drastically. I’ve spoken to some ICO listing sites and during the ICO glory days, they could charge 50k, 100k for listings, but now they’re struggling to get a few thousand and some listing sites struggle to even get a few hundred dollars per listing.
So overall, yes I think STOs will match ICOs in popularity by this year and could possibly overtake it.”
Growth Of The STO Has Been Slowed By A Lack Of Liquidity
“The STO is the new ICO, but the growth of the STO has been slowed immensely by a lack of liquidity and secondary market options. The biggest advantage of an STO over a traditional private placement of capital was the ability to generate liquidity. Yet as of now there is not ample liquidity in the marketplace, which is slowing the growth of the STO.”
“It’s clear that Securities Token Offerings (STO) are the only way forward vs. the utility-based, Initial Token Offerings (ICO). Most ICOs should be STOs because they use the fundraising mechanism to fund a new venture or expand an existing operation. This means the tokens are not 100% utility.
Even if the latter is true for 1% of the offering, then the entire fundraiser becomes a securities offering, which is a regulated process and consequently attracts a wider investor community. Also, by doing the STO, the project has a much better chance of clearing regulatory audit and avoiding later regulatory enforcement action. It’s clear that Securities Token Offerings (STO) are the only way forward vs. the utility-based, Initial Token Offerings (ICO). Most ICOs should be STOs because they use the fundraising mechanism to fund a new venture or expand an existing operation. This means the tokens are not 100% utility. Even if the latter is true for 1% of the offering, then the entire fundraiser becomes a securities offering, which is a regulated process and consequently attracts a wider investor community. Also, by doing the STO, the project has a much better chance of clearing regulatory audit and avoiding later regulatory enforcement action.”
“Yes I believe that STOs are the new ICO. While still not as popular as ICOs were during their peak, they are growing in popularity. The reason that they are growing in popularity is that investors want an ownership stake in projects, Utility tokens were nice but investors are now looking for the projects to provide a return/stake rather than hoping to flip the coins they acquired from an ICO.
Over the next year or two, I believe that STO will be the majority of coins issued.”
“STOs, or security token offerings provide a much safer investment than the standard ICO, or initial coin offering. This is because they are backed by real financial assets. This may be real estate or shares, but can even be something like an art collection. So an STO is really just a secure way of making an investment on a certain set of assets. I suspect STOs will gain popularity, especially after the abysmal year cryptocurrency suffered in 2018. Over half of the ICOs in 2018 made no money for buyers, so people will be looking for something more secure, like STOs. That said, I think the two occupy separate realms of investment. Because, while the STO is safer, it is unlikely to ever achieve the types of gains seen by Bitcoin, because they are backed by a relatively stable asset. So investors seeking a riskier, but possibly more lucrative investment, may still seek out ICOs. In short, I don’t see STOs completely replacing ICOs.”
Suffice it to say, there is no definitive answer as to whether or not STOs will replace ICOs as the fundraising method of choice for blockchain projects. Yet, as the industry matures, it is imperative that a legitimate form of fundraising is created that embraces accountability and compliance. Do you think STOs will replace ICOs? Let us know by commenting below.
At TokenMarket, our mission is to provide all types of investors access to the next generation of rapid growth companies at a much earlier stage compared to traditional financing models. Transparency for us, like blockchain, is one of our founding principles. As of late, we realised there is a lot of white noise when it comes to regulation in the digital asset space. “We are regulated by this jurisdiction with this license which means we are able to…” It is confusing, to say the least.
This comprehensive guide is designed to outline why TokenMarket is pursuing licenses in these various jurisdictions, and in what way they help achieve our mission within the blockchain ecosystem. Of course, there are various different licenses in each jurisdiction so we have described each by the country for ease.
The ICO boom in 2016 and 2017 brought a lot of bad actors into the crypto space as they tried to financially capitalise quickly. As a result country’s like Gibraltar wanted to provide trusted third party verification of these companies. This, in turn, allowed users to have an added layer of trust to businesses which had been rigorously checked and verified.
The result of this need within Gibraltar is the Distributed Ledger Technology (DLT) Licence which was the earliest “blockchain” licence available in Europe. TokenMarket Ltd (TML) is incorporated in Gibraltar and was one of the first businesses globally to have received “In-Principle” approval as a DLT provider.
This licence allows TokenMarket to make use of DLT for storing or transmitting value belonging to others but more importantly allows TokenMarket to ensure it is being held to a higher standard than others on the market.
TokenMarket Capital Limited (TMCL), a fully owned subsidiary of TokenMarket Limited (Gibraltar), has recently been granted an “Innovation Testing License” (ITL) by the Dubai Financial Services Authority (DFSA).
The ITL allows TokenMarket Capital Limited to operate as a Category 4 Advisor/Arranger for issuers of/investors in Security Token Offers in or from the Dubai International Financial Centre (DIFC) for the duration of the ITL. TokenMarket expects the ITL restrictions to be lifted following “graduation” from the ITL. This is just the first step of our two-phase entry into the United Arab Emirates and the region.
The second, and main phase is to establish a DFSA-licensed and regulated Authorized Market Institution in order to operate a Tokenized Securities Exchange in or from the DIFC (the “Exchange”). The proposed Exchange remains the cornerstone of TokenMarket Group’s strategy and an integral part of its overall business plan. Therefore, we remain fully committed to working with the DFSA to obtain the necessary licenses and authorizations in order to achieve the plan we set out for the DIFC.
Given the recent and positive developments in the TokenMarket Group, we can now allocate additional resources to this project (as necessary) and hire dedicated teams to manage the Exchange’s license application process and to efficiently implement our strategy for the United Arab Emirates. Our firm target is to submit our final license application for the Exchange no later than September 30th, 2019.
TokenMarket Technologies Ltd (TMT), the UK wholly owned subsidiary of TokenMarket Ltd (TML), was accepted into the Financial Conduct Authority’s (FCA) Sandbox, allowing TokenMarket to test its equity crowdfunding platform via tokenised securities. TMT will have a restricted licence to arrange transactions in securities for its first security token offering (STO) and will aim to get the restrictions lifted.
TokenMarket is allowed to raise up to £2 million whilst in the FCA Sandbox and the eventually unrestrictedly authorised TokenMarket Platform will allow issuers to raise up to €8 million without a prospectus by selling securities to investors including to “Everyday Investors”. Broadly, anyone can become an Everyday Investor. The Investor just needs to agree, by self-certification, to invest no more than 10% of their assets into company shares, bonds, funds or any other securities which are not listed or sold on a stock exchange.
This license, in short, allows TokenMarket to issue securities in a tokenised form and gives investors the ability to purchase equity in startups via blockchain. Thus, the benefits of blockchain such as instant settlement, ownership of assets and, once the third-party infrastructure for trading comes to fruition, 24/7 markets, can be matched with protections that owning equity in a business and regulated markets bring.
In a similar approach taken in Dubai, TokenMarket Limited are looking to secure two licences for trading and issuing of tokenised securities. The Malta licences are paired with the UK to allow the trading of tokenised securities across Europe. In Malta, however, there is one licence for the trading of utility tokens and a second for the trading of security tokens.
TokenMarket Ltd (TMM), the Maltese wholly owned subsidiary of the Gibraltan TokenMarket Ltd (TML), has been grandfathered as a Class 4 VFA Service Provider under the Virtual Financial Assets Act of Malta under which TMM has launched its Virtual Financial Assets (VFA), for example, utility token, exchange. TokenMarket will now submit its application for a full licence.
The VFA Service Provider licence does not allow TokenMarket to list securities on its exchange. TokenMarket is in the process of preparing its application for a Markets in Financial Instruments Directive (MiFID) a broker/dealer licence and a multilateral trading facility in Malta, which will allow it to launch a security token exchange using the technology of its VFA exchange.
In a market as quick moving as blockchain and fin-tech, regulation can be frustrating in its relatively slow speed. This is why TokenMarket has been working within several jurisdictions to marry the two for over 18 months now.
Ultimately this will be of benefit to our users and to the blockchain ecosystem, ensuring that protection and trust can be had from every player in the ecosystem.
Understanding the benefits of regulation and working alongside the regulatory bodies, rather than ignoring them, will only improve the ecosystem for all the players in this market.
London, ENGLAND – June 10, 2019 – Global investment platform TokenMarket today announces that it has received approval from the FCA to run its Security Token Offering (“STO”) in the regulatory sandbox. Following the formal approval, TokenMarket will announce a launch date for its STO in the coming weeks and invite global investors to invest in the Company’s tokenised equity shares.
Since the Company was founded at the end of 2016, TokenMarket has helped to raise £240m for 30 start-ups, including successful utility token offerings such as Storj, Fetch.ai, Civic, Dent and Crypto.com.
Today’s FCA’s approval is a critical step in securing a regulated and compliant ecosystem for STOs, a cheaper, easier way for companies to raise money. Once TokenMarket has completed its STO and exited the sandbox the Company will be able to organise STOs for UK and international companies looking to source growth finance by tapping TokenMarket’s pool of 170,000 investors.
TokenMarket has already lined up a rich pipeline of ambitious start-ups that plan to raise capital through STOs in London including:
· DOVU – a unified token, wallet and marketplace for earning and spending mobility-related rewards
· Almond – a free app that allows users to reduce their carbon footprint and rewards sustainable consumption
· Cryotech Nordic – the world’s leading provider of cryotherapy cabins
Ryan Hanley, Managing Director, commented:
“We are delighted to announce the FCA’s approval for our STO, with the launch expected imminently. We look forward to exiting the sandbox, completing our fund raise and tokenised equity issuance, and then cracking on with launching STOs for other ambitious businesses.
“Access to finance is still a big issue for SMEs- it remains difficult and expensive, and this is holding back economic growth, and job and wealth creation. We hope our own STO can demonstrate that you can use blockchain technology to transform the way capital is raised.
“At the same time, we want to offer our wide and deep pool of international investors the type of exciting investment opportunities that were previously closed off to them. We believe STOs promise nothing less that the transformation and democratization of capital markets.”
Although we may not be in the midst of the wild “ICO Boom” of two years ago, there is no scarcity of active ICOs today. In this article, industry experts provide invaluable insight into regulatory scrutiny and ICOs that will take off in 2020.
Coinchase ICO, HyperionX, ICO, and Miracle Tele ICO
“ICOs are proving to be life-changing investments especially for raising funds for projects. But this is also a high-risk investment in the ever-volatile cryptocurrency market. While ICOs are hyper-profitable and promising, only a handful will be able to take off in 2020. The lack of an authoritative criteria for assessing and analyzing ICO investments presents a new challenge for alternative investors. But industry experts can already predict what will happen in 2020.
These ICOs are most suited for risk-averse investors: Coinchase ICO, HyperionX ICO and Miracle Tele ICO. They are promising projects with great potential for explosive returns. Their specific industries such as telecoms, financial services, and blockchain infrastructure are evergreen and with potential for maximum returns. These ICOs also have a growing community to go along with their development.”
“I believe that the biggest boost an ICO can get is by integrating a KYC/AML solution. It will not only help in generating positive hype about the responsible and transparent tendencies of the ICO but it will help build a positive relationship with regulators and compliance bodies that are otherwise not very enthusiastic about the prospects of an ICO.
To explain the impact of using services from a KYC/AML service providers, I will quote the example of Ontology. The base price of its utility token jumped from $2 (more than 10%) overnight as soon as it was announced that they have partnered with Shufti Pro and their market cap reached the phenomenal heights of USD $425 Million.”
Saturn Network Is The Most Underrated ICO
“Investors are now terrified of investing in ICOs, and rightly so. The number of scams and failed ICOs in 2018 reached a big number, resulting in investors becoming more cautious. The most underrated ICO, in my opinion, is Saturn Network.
It is a Decentralized Exchange (DEX) that is truly decentralized, meaning the exchange never touches your funds at any time due to their wallet-to-wallet trading. The super smart team have coded many tools including airdrop tools, crypto trading bots, and even decentralized initial exchange offerings. It currently has a DEX on Ethereum and Ethereum Classic (first of its kind). We have seen Binance’s BNB give ICO investors a 266x return. Saturn is currently an undiscovered gem, with huge room to grow.”
“Initial Coin Offering (ICO), is a fundraising method which uses utility tokens to represent the network platform activity. So, the token is particularly useful only when used within the platform. Some possible
reasons for not believing that ICO’s will take off are:
1. The lack of governance, which has led to an increasing number of scams in the recent past.
2. More than 90% drop in the investments in the ICO over the last year from highs of $1.5 Billion during Jan’18 to almost $74 million during the year-end.
3. Introduction of Security Token Offering (STO) which use security tokens based on assets that are tradable, deriving value and compensation or profits from the associated business.”
“For people who like blockchain technology know that to run blockchain, you need cryptocurrencies. Blockchain projects have been using Initial Coin Offering (ICO) to raise funds for bringing their vision to reality since 2013. However, ICOs gained higher adoption and craze during 2017, when they started giving exponential returns on investment (ROI).
I have researched over 50 ICOs and have invested in over a dozen of them to date. I have also advised my clients at DayOrg Consulting Group (www.dayorg.in) to invest in ICOs, that have resulted in good returns for them.
The following is a list of 3 ICOs which can perform extremely well in 2020, considering their tech and development :
Globalcoin – Most of the world population is aware of and using Facebook almost on a daily basis. So when this social media giant decided to roll out their own cryptocurrency, Globalcoin, it instantly became my top pick considering that Facebook might be considering to raise as much as $1 billion to fund this Stable coin project. If Globalcoin comes with an ICO, it will be a top pick and best performing ICO of 2020
Hedera Hashgraph (HBAR) – This is indeed a very good project. The team is very good and over 300 companies are building on Hedera Hashgraph already. They have utilized a new Gossip protocol and a unique voting mechanism. Hence they can have ultra-high transaction volumes for public blockchains. The token is listed only on very small exchange DFLOW. It can do extremely well once it lists on a good exchange with high volumes, hence can give very good ROI in 2020.
Edenchain (EDN) – This token is not performing well and is considerably down from ICO price. However, Edenchain is utilizing namespace technology that enables it to scale in a lot of ways, which is an advantage over Hyperledger. With the Mainnet launch and new exchange listing, it can do very well in the near future.”
The heady days of 2017 when ICOs raised billions of dollars for blockchain companies may be behind us, but ICOs are definitely still a popular method of fundraising capital. Yet, investors must be mindful that this is a high-risk investment in a volatile market. Take into account the expert industry advice provided here and always do your due diligence.
London – 3rd June: Global investment platform TokenMarket today announces a partnership with CMS equIP, the global accelerator programme for tech start-ups run by international law firm CMS. equIP will become preferred legal advisor to ambitious growth companies that are raising capital via Security Token Offerings (‘STOs’).
The partnership brings together two specialist support providers for early-stage, businesses looking to raise growth finance. TokenMarket has completed more than 30 blockchain-based fundraises since the end of 2016, helping to secure over £250M for its clients. The company was one of the first to apply for digital asset licenses in the UK, Malta, Gibraltar and Dubai in order to perform security offerings on the blockchain.
CMS equIP offers affordable legal advice and other value added services including exclusive training, introductions and networking opportunities to early stage, IP-rich start-ups across 20 countries, giving them access to proven industry expertise at every stage of their growth, whether they are expanding their business, entering a new market, looking for advice under a different country’s law or structuring a deal in another jurisdiction.
equIP’s global reach and reputation mean it can offer businesses around the world the same levels of high quality legal advice, training, mentoring and networking opportunities, all the while reflecting local practices, laws and regulations. Since its inception, equIP has successfully helped over 100 technology clients to successfully complete over 60 individual rounds of fundraising.
Today’s partnership will help SME growth companies in the CMS equIP programme to raise finance through STOs, leveraging TokenMarket’s investment platform and investor community. In turn, TokenMarket clients will be able to access expert legal advice to support their STOs.
TokenMarket and CMS equIP together will deploy a vigorous selection process to carefully select companies which they believe have the best commercial possibility for exits in a 3-7 year window. The creation of tokenised primary and secondary markets will provide self-certified investors access to new investments, and quicker opportunities for exits, than those offered by traditional VC or private equity deals.
Ryan Hanley, Managing Director, commented:
“SMEs are the backbone of any modern economy, but many are held back by the scarcity and expense of growth finance. STOs open up a new, cheaper, easier way for ambitious companies to raise capital. Today’s announcement is an exciting milestone for bringing STOs further into the mainstream. By partnering with CMS equIP, not only will we identify companies with the most commercial promise, but we will offer these companies another, crucial level of support in navigating the world of STO financing.”
Charles Kerrigan, Banking Partner at CMS, added:
“We are pleased to partner with TokenMarket. TokenMarket are a young and innovative company representing a number of exciting businesses from across the blockchain community who boast exceptional qualities that we seek from early-stage businesses joining the CMS equIP programme. Our partnership will also provide real value for equIP members who are interested to explore the STO framework of financing via TokenMarket’s investment platform and community. We are excited to be working with TokenMarket and their clients, and look forward to the synergies that this partnership will bring.”
For more information contact:
James Isola, Maitland
Tel: +44 (0)207 379 5151
Laura Swartz, CMS
Tel: +44 (0)207 367 2303
TokenMarket is a global investment platform providing an end-to-end service for token creation, presale and public sale, supporting safe and secure Initial Coin Offering (‘ICO’) or Security Token Offering (‘STO’). Founded in 2016, TokenMarket has offices in London, Gibraltar, Helsinki and Singapore. Since 2017 TokenMarket has assisted over 30 of the most innovative blockchain companies raising over £240m in total, issuing digital tokens to over 250k investors.
CMS equIP is a curated accelerator designed to give IP-rich start-ups and entrepreneurs in the technology sector the tools they need to grow and succeed. Through this platform, CMS lawyers and specialists act as trusted advisors, providing start-ups with access to investors, exclusive training and mentoring opportunities and an active peer network. Members have access to industry-focused legal advice across all areas of law at discounted rates from lawyers highly experienced in working with entrepreneurial companies. Launched in the UK in 2015 and now offered in 20 countries, the global programme has worked with over 100 companies including, Sonalytic, Appyparking, Crowdicity and Passle.
CMS provides clients with specialist, business focused advice in law and tax matters. With our 4,500 legal professionals across the world, working in sector-based teams and expert in project management, our focus is on our clients and fulfilling their objectives.
Security tokens are digital securities that are recorded on the blockchain and regulated in the same way as ordinary securities, offering investors the same rights and protections.
London, ENGLAND – May 28, 2019 – TokenMarket, the blockchain-based global investment platform, today announces its partnership with Loopring, the protocol for decentralised token exchanges. The collaboration will accelerate security and transparency in the US$222 billion digital asset trading market.
The two companies will work together to launch Loopring Protocol 3.0 within TokenMarket’s upcoming decentralised securities exchanges, located in Europe and the Middle East. While current decentralised exchange speeds allow approximately two trades per second to be settled on the Ethereum blockchain, Loopring Protocol 3.0 allows up to 525/sec by using zero-knowledge proofs, dramatically increasing throughput and improving the speed and cost of TokenMarket’s decentralised exchanges.
Founded in 2017, Loopring is an open-sourced protocol for building decentralised exchanges and supporting infrastructure. It has been designed to give users and developers multiple benefits, such as non-custodial settlement, order sharing, anti-front running, and the ability to be deployed on multiple smart contract platforms.
Protocol 3.0 has focused on providing scalability without sacrificing the security guarantees offered by public blockchains. It does so by ensuring that only a small amount of information requires on-chain verification, with most activity being compressed into proofs. It thereby allows decentralized exchanges to offer better safety, with comparable speeds previously only found on centralized exchanges.
Upon the announcement, TokenMarket CTO and Co-founder Mikko Ohtamaa stated:
“Using Loopring Protocol 3.0 will enable our users to have even more protection on our decentralised security token exchange. The groundbreaking protocol Loopring has developed, combined with our decentralized platform, will give users the freedom that centralised exchanges simply do not have. I am excited to be working closely alongside the Loopring team as things develop.”
Concurrently, Loopring Founder and CEO Daniel Wang said in a statement:
“Our mission is to support the future of value exchange, and we’re thrilled that TokenMarket has chosen to integrate and build upon Loopring to power their platform. TokenMarket has ambitious plans regarding security token trading venues, which is a sector Loopring has developed infrastructure for since version 2 of our protocol. We’re optimistic their experienced team will excel.”
Loopring Foundation is a blockchain research organization focused on decentralized trading protocols. The open-source Loopring Protocol provides a fundamental building block for non-custodial exchanges (DEXs) and other applications that incorporate trustless token trading. Loopring 3.0 leverages zero-knowledge proofs, allowing for significant throughput increases while maintaining the security guarantees of the Ethereum blockchain. Loopring also offers an auction protocol called Oedax (Open-Ended Dutch Auction Exchange).
TokenMarket is pleased to announce that it will be able to offer a generous discount for the upcoming Becon Global event taking place in London next week.
Hosted by CMS Law the upcoming The Future of Finance event, which takes place in London on June 6th will see some of the greatest minds in law, blockchain and tokenised securities come together in order to discuss the future of tokenised assets.
Ryan Hanley, UK Managing Director of TokenMarket Technologies Ltd, is set to speak at the London event, giving the audience an “Introduction to Security Tokens.” After a successful keynote in New York at Becon Global’s first event, Hanley is excited to give UK and EU audience members an insight into the world of tokenised securities.
Having gained vast insight into the world of raising capital through the blockchain space, Hanley has been able to help facilitate more than 30 disruptive Startups raise more than £240m. Giving users a deeper insight into the world of tokenised securities, Hanley will be able to discuss some of the common misconceptions that this new form of fundraising method and share has around it.
Other guest speakers include Timo Lehes, President at Swarmfund, Gordon Einstein, Partner at Cryptolaw Partners, Nils Veenstra, CEO at New Alchemy and Elizabeth White, CEO at The White Company as well as many more.
Attendees can also expect to hear and discuss other interesting and insightful topics in the tokenised securities space including: security tokens, how to issue tokens in the blockchain, regulation and governance, an investor’s perspective on tokenised securities, developing an ecosystem for digital real estate assets and the role of stablecoins.
TokenMarket is pleased to give its users an exclusive 70% discount using the code: TokenMarket when registering to buy a ticket.
Follow the link here to find out more and to claim this generous offer.