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ICOs Continue to Raise Money via SEC Back Door

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French ICO

The number of initial coin offerings getting through the back door at the Securities and Exchange Commission skyrocketed last year, as the securities regulator sent mixed messages about the future of investment contracts based on digital assets.

MarketWatch counted 287 ICO-related fundraisings accepted by the SEC with a total stated value of $8.7 billion in 2018, peaking at 99 in the second quarter. That’s a significant increase from 44 fundraisings filed with a total stated value of $2.1 billion in 2017.

ICO promoters gained access to accredited investors through a back door called Form D, as first reported by MarketWatch in February of last year.

Form Ds are notices filed by a company for an offering that is exempt from full SEC registration requirements. The key criteria for the Form D exemption is that only “accredited investors,” that is, individuals that have a net worth of over $1 million, or that have consistently made over $200,000 per year in income, or companies that have over $5 million in assets, can invest. Companies don’t have to file the Form D before the offering takes place, but instead within 15 days after the first sale of securities in the offering.

MarketWatch searched the SEC’s Edgar database for mentions of words including “coin,” “ICO,” “token,” “initial coin offering” and “saft.” The SEC has been taking steps to warn investors and limit the number of scams from initial coin offerings. Chairman Jay Clayton repeatedly reassured markets in 2018 that no ICOs were “registered” by the SEC.

In May, the SEC’s Office of Investor Education and Advocacy’s tried to capture investors’ attention by setting up a mock ICO website using a bogus coin offering to educate investors about scam red flags. The SEC called it HoweyCoins.com, after the SEC v. Howey, the Supreme Court’s test for whether a transaction qualifies as an “investment contract” and is therefore regulated by the SEC.

In November, the SEC settled its first cases imposing civil penalties solely for ICO securities offering registration violations. The SEC had charged two companies that sold digital tokens in ICOs in 2017 — Airfox, a Boston-based startup that raised $15 million and Paragon, an online entity that raised approximately $12 million — without registering the tokens as securities or filing periodic reports with the SEC.

Later that month, the SEC brought their first cases over touting violations for initial coin offerings, charging boxer Floyd Mayweather Jr. and music producer DJ Khaled.

Based on MarketWatch’s analysis, the SEC’s actions may have helped to slightly staunch the demand for more offerings. But the public statements and speeches of SEC officials belied a reluctance to close the door completely on digital assets and the investment contracts based on crypto-concepts.

SEC commissioner Hester Peirce is a crypto booster, industry advocates say. They’ve nicknamed her “Crypto Mom” after remarks in dissent of a decision by the SEC to reject the application from Cameron and Tyler Winklevoss for a bitcoin-backed exchange-traded fund.

In a speech via video to the Crypto Valley Summit in Zug, Switzerland on Nov. 7 she acknowledged that U.S. regulators are “admittedly sending mixed messages” because they are “coming to terms with crypto in different ways” and not always coordinating with each other.

“For example, our sister regulator, the Commodity Futures Trading Commission, has allowed the development of crypto-derivatives markets, but the SEC so far has not approved any application to list an exchange-traded product based on cryptocurrencies or crypto-derivatives trade on U.S. exchanges,” she told the audience.

Peirce said, “regulators have an unfortunate habit of allowing their own conservatism and their legitimate fear that they will be blamed when investments go wrong to curtail investors’ options.” She favors a different approach, one that “allows investors—informed by good information about the relevant exchange-traded product and encouraged to exercise a healthy dose of skepticism—to choose whether or not to buy the product. I am working on convincing my colleagues.”

In April Coindesk.com reported that Clayton told a Princeton University audience he rejected the idea that all ICOs are fraudulent, even though in February, in he said that he believes “every ICO” he’s seen qualifies as a security. Clayton opened the talk by saying he believes that “distributed ledger technology has incredible promise for the financial industry.”

On Dec. 6, Clayton told an audience at Columbia University, “I believe that ICOs can be effective ways for entrepreneurs and others to raise capital,” Clayton said, while also warning that “the novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed.”

These ICOs could potentially become available to retail investors and consumers, who are supposed to be protected from scams by SEC, as a result of the growth of secondary markets for the crypto-tokens that were created by these ICOs.

Several cryptocurrency-related firms are pursuing alternative trading systems or ATS licenses with the objective of providing trading platforms for ICO tokens and other cryptocurrencies. The SEC regulates these trading platforms, which trade securities listed on national exchanges but are not registered as exchanges themselves.

Coinbase acquired three firms, one of which — Venovate Marketplace — is registered as an ATS. Overstock already had an ATS from a previous acquisition. One of its subsidiaries, tZero, is using it to build a security token exchange.

Spokespersons at the SEC and CFTC did not respond to requests for comment due to the government shutdown.

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seriesOne and Polymath Partner to Deliver an End-To-End Solution for Security Token Issuers

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Blockchain Consortium

seriesOne announce that it has partnered with Polymath, the industry leading security token platform, to simplify the complex challenges of creating and managing security tokens (blockchain-based digital securities). This is a critical component of the full digital securities offering ecosystem available through the seriesOne platform.

The partnership with Polymath enables issuers to create and manage tokens that are compliant throughout their entire lifecycle; from initial offering to trading on a secondary exchange. “We believe that the token control layer offered by Polymath will be the industry-wide standard and we are excited to be working together,” said seriesOne CTO Dmitry Grinberg.

“Investors around the world trust Polymath, which was fundamental to our decision to work together,” said Michael Mildenberger, CEO of seriesOne. “We are confident that working with the Polymath team using the ST-20 protocol will enhance the process of raising capital on our platform.”

“Polymath is proud to work with innovative partners like seriesOne, who has fulfilled a specific demand for a turnkey financing portal for any fundraising process,” said Kevin North, CEO of Polymath. “We are thrilled to be the chosen technology standard for the seriesOne platform, and we look forward to demonstrating yet again how industry can work together to set a standard for creating and managing a successful Security Token Offering (STO).”

seriesOne, led by executives with over 20 years of traditional investment banking, venture capital and technology experience, is entering its partnership with Polymath at a time of rapid expansion for the company. seriesOne recently announced that it has formed a joint venture with Bithumb, one of the top crypto exchanges in the world, to build a digital securities exchange in the U.S.

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Binance Launchpad: Celer Network Token Sale Results

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Binance Launchpad, the exclusive token launch platform of Binance helping transformative blockchain startups raise funding to develop their products aiding in cryptocurrency adoption, has completed the sale of Celer Network (CELR) tokens, which began on March 19, 2019 at 2:00PM UTC. The token sale was conducted through a single session where participants purchased CELR tokens using Binance Coin (BNB). In this session, all 597,014,925 CELR tokens were sold to Launchpad participants within 17 minutes and 35 seconds.

At the time of the sale, one CELR token was priced at 0.000434 BNB. Allowing 1 BNB to purchase 2,303.35821 CELR tokens. Launchpad participants were able to purchase between 2985.074626865672 CELR tokens (the minimum amount eligible for purchase) and 223,880.597 CELR tokens (the maximum amount).

Celer Network is a layer-2 scaling platform that enables fast, easy and secure off-chain transactions for not only payment transactions, but also generalized off-chain smart contracts.

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Blockmason Announces Bitsonic Token Generation Event for BLINK, the Link Utility Token

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Aidemy

Blockmason, a leading developer of foundational, base-layer blockchain technologies, and Bitsonic, a leading Korean digital asset exchange, today announced the Token Generation Event (“TGE”) for BLINK, the Link utility token. The BLINK TGE will be held on Bitsonic starting on Monday, March 18, 2019.

BLINK is the official utility token powering Blockmason Link, a new blockchain infrastructure-as-a-service that allows app, web and other software developers to use smart contracts and programmatic blockchains like Ethereum, TRON, EOS, GoChain and others in their applications without requiring any blockchain experience. Using Link, a developer can create classic, conventional web-based APIs for any smart contract written on a programmatic blockchain.

“We are excited to partner with Bitsonic, one of the premier digital asset exchanges in Korea, to host our TGE for BLINK,” said Michael Chin, Chief Executive Officer of Blockmason. “We’re looking forward to making BLINK available to software developers, startups and others interested in the incredible innovations that Link will bring to the blockchain technology space.”

Link is viewed as the missing component in blockchain-based app development. With Link, developers and users alike can interact with smart contracts like any other web API. There are no “gas” cryptocurrencies to acquire, browser plugins to install or other unnecessary hurdles. There’s also no servers or web infrastructure to maintain or monitor. A developer simply adds the smart contracts they want to use in their app to Link. Once added, they can read from and write to these smart contracts just like any other API.

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Cryptocurrency Firm Agrees to Stop Using Alibaba Name

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Alibaba

A cryptocurrency firm said it will stop using trademarks including the term “Alibaba” as part a settlement of a lawsuit brought by Alibaba Group Holdings Ltd, the Chinese e-commerce retailer.

ABBC Foundation announced the settlement on Monday, in a statement confirmed by its U.S.-based lawyer.

The firm, which has offices in Dubai and Belarus and was also known as Alibabacoin Foundation, said it regretted any public confusion arising from its “former use of Alibabacoin.” Its cryptocurrency is now called ABBC Coin.

Alibaba did not immediately respond to requests for comment. A U.S.-based lawyer for Alibaba declined to comment.

The Chinese company had accused ABBC of confusing customers and hurting its business in the United States by using its trademarked name to raise more than $3.5 million in Alibabacoins.

ABBC countered that it was not trying to piggyback off the Alibaba name, and that China’s September 2017 ban on initial coin offerings eliminated a main source of potential confusion.

The case is Alibaba Group Holdings Ltd v. Alibabacoin Foundation et al, U.S. District Court, Southern District of New York, No. 18-02897.

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Making Your VR World a Reality – Virtual Reality Park Launches ICO

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vrr

With a huge array of industry sectors embracing Virtual Reality (VR), the day to day applications for VR are becoming more and more widespread.

According to Goldman Sachs the capitalisation of the VR industry by 2021 alone will be worth some $300bn – what is needed however is a global platform to deliver VR its true potential.

Embracing the Global Connectivity of Virtual Reality

Ever wanted to visit a far-flung part of the world but don’t have the time or budget to do so? Well, now you can. Virtual Reality Park brings the world to you!

Founded by our team of experts in 2016 and with a number of global VR Parks planned from Las Vegas to Dubai and Tokyo; VR Park is a cutting-edge platform that combines the latest VR technology and creative innovation into one location. According to Kirill Granev, CEO of Virtual Parks:

‘The restart of the era is the end of the world known to us and the beginning of a new one. Virtual and augmented reality (VR and AR) has long been used not only in entertainment. Yes, the games give a solid push for development and good financial investments, but this is not enough. Right now, many large corporations around the world are experimenting with VR / AR. With the help of these technologies, you can train personnel, develop equipment, trade and much more. As a business person, I am sure that the future is behind virtual reality!’

Global connectivity is now at its peak the and the day to applications for VR are endless, so too are the commercial opportunities for VR. From education and training to the military, medical training, aviation, and tourism the profitability of the sector as a whole is calculated in the tens of billions of dollars.

Create Your Own Dreams With the Virtual Reality Park ICO

With our own smart body control technology, the user can experience a world away from the norm – Whatever your passion – be it history, sports, fantasy worlds, literature or visiting the seven wonders of the world the ICO will create the platform that will take you there!

Ranging from 800 to 3000 square meters, the Virtual Reality Parks will extend to some 28 countries around the world including the Americas, Europe, and the UAE.

We have over 200 million VR Tokens for sale and based on the ERC-20 ETH Standard smart contract, the VR Token forms the whole basis of the VR Park platform. The VR Token is used by park visitors to pay for both games, modules and platform access and with a 15% discount for VR Token payments, the savings can be great too!

With a PR Park roadshow planned for the coming quarter, we look forward to meeting you!

We have the technology and vision – join us on our journey and become part of the VR Park Story!

About Us: Virtual Park is a platform for the development of VR industry in the global market. Thanks to the technological solutions of Virtual Park Company, we will present users with new opportunities to interact with the virtual world, identifying trends in the development in the industry.

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Making Your VR World a Reality – Virtual Reality Park Launches ICO

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vrpark

With a huge array of industry sectors embracing Virtual Reality (VR), the day to day applications for VR are becoming more and more widespread.  According to Goldman Sachs the capitalisation of the VR industry by 2021 alone will be worth some $300bn – what is needed however is a global platform to deliver VR its true potential.

Embracing the Global Connectivity of Virtual Reality

Ever wanted to visit a far-flung part of the world but don’t have the time or budget to do so? Well, now you can. Virtual Reality Park brings the world to you!

Founded by our team of experts in 2016 and with a number of global VR Parks planned from Las Vegas to Dubai and Tokyo; VR Park is a cutting-edge platform that combines the latest VR technology and creative innovation into one location. According to Kirill Granev, CEO of Virtual Parks:

‘The restart of the era is the end of the world known to us and the beginning of a new one. Virtual and augmented reality (VR and AR) has long been used not only in entertainment. Yes, the games give a solid push for development and good financial investments, but this is not enough. Right now, many large corporations around the world are experimenting with VR / AR. With the help of these technologies, you can train personnel, develop equipment, trade and much more. As a business person, I am sure that the future is behind virtual reality!’

Global connectivity is now at its peak the and the day to applications for VR are endless, so too are the commercial opportunities for VR. From education and training to the military, medical training, aviation, and tourism the profitability of the sector as a whole is calculated in the tens of billions of dollars.

Create Your Own Dreams With the Virtual Reality Park ICO

With our own smart body control technology, the user can experience a world away from the norm – Whatever your passion – be it history, sports, fantasy worlds, literature or visiting the seven wonders of the world the ICO will create the platform that will take you there!

Ranging from 800 to 3000 square meters, the Virtual Reality Parks will extend to some 28 countries around the world including the Americas, Europe, and the UAE.

We have over 200 million VR Tokens for sale and based on the ERC-20 ETH Standard smart contract, the VR Token forms the whole basis of the VR Park platform. The VR Token is used by park visitors to pay for both games, modules and platform access and with a 15% discount for VR Token payments, the savings can be great too!

With a PR Park roadshow planned for the coming quarter, we look forward to meeting you!

We have the technology and vision – join us on our journey and become part of the VR Park Story!

About Us: Virtual Park is a platform for the development of VR industry in the global market. Thanks to the technological solutions of Virtual Park Company, we will present users with new opportunities to interact with the virtual world, identifying trends in the development in the industry.

For all media inquiries please contact Katarina Stabredova or visit our website.

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Novem Backs NNN Gold Tokens with Nearly $1.5 million in LBMA-Certified Gold

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Goldman Sachs

Novem will revolutionise the gold buying experience with the upcoming launch of the world’s safest and most transparent gold-backed stablecoin, the Novem 999.9 (NNN) gold token.

The Novem NNN gold token is entirely backed by LBMA-certified gold held in trust. NNN gold tokens will be minted only based on gold held by Novem, and each token is redeemable for physical gold at a rate of 1/100g per token.

“Novem will soon be introducing the best way to buy gold on the blockchain with the NNN gold token. It will be revolutionary, not only from the point of view of those who buy and sell gold, but also as a superior definition of what a stablecoin can be,” Wolfgang Schmid, the CEO of Novem said.

“Novem will back every NNN token with physical LBMA-certified gold. We will continue to increase the gold we hold in trust and are committed to minting NNN tokens based only on the gold is securely stored with Loomis. In that way, buyers of our NNN tokens can be sure that their purchase is 100% backed by physical gold.”

NNN gold tokens are directly tied to physical gold, stored by industry leader Loomis International. NNN gold tokens are minted based on gold held as collateral by Novem, and over 34 kg worth nearly $1.5 million is held in storage at the time of the sale.

In addition, more than $1.2 million has already been invested through a private sale in Novem’s blockchain expansion and coin offerings.

Novem is an extension of an existing profitable business of physical stores that buy and sell old gold. Their gold tokens are a new offering by this functioning retail business, and profits from the token sale will be reinvested into retail outlets which will open in major cities across Europe.

Novem utilises NEO blockchain technology to digitise assets and automate the management of digital assets using smart contracts. The NEO platform was chosen due to its speed, functionality, and innovative developer community. NEO is soon to be hardened against attacks from quantum computing, creating long-term safety for token holders.

NNN gold tokens will be available for purchase starting on February 28, 2019.

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Company Settles Unregistered ICO Charges After Self-Reporting to SEC

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French ICO

The Securities and Exchange Commission charged Gladius Network LLC with conducting an unregistered initial coin offering (ICO), which the company self-reported to the SEC.

According to the SEC’s order, Gladius conducted an ICO in late 2017, after the Commission had warned in its DAO Report of Investigation that ICOs can be securities offerings. Gladius, a Washington, DC-based company, raised approximately $12.7 million in digital assets to finance its plan to develop a network for renting spare computer bandwidth to defend against cyberattacks and enhance delivery speed. Gladius did not register its ICO under the federal securities laws, and the ICO did not qualify for an exemption from registration requirements.

Gladius self-reported to the SEC’s Enforcement staff in the summer of 2018, expressed an interest in taking prompt remedial steps, and cooperated with the investigation. The SEC did not impose a penalty because the company self-reported the conduct, agreed to compensate investors, and will register the tokens as a class of securities. The case follows the Commission’s two recent ICO registration cases, in which companies agreed to pay penalties for similar registration violations and agreed to similar undertakings.

“The SEC has been clear that companies must comply with the securities laws when issuing digital tokens that are securities,” said Robert A. Cohen, Chief of the SEC’s Cyber Unit. “Today’s case shows the benefit of self-reporting and taking proactive steps to remediate unregistered offerings.”

Pursuant to the order, Gladius undertakes to return funds to those investors who purchased tokens in the ICO and request a return of funds, and register its tokens as securities pursuant to the Securities Exchange Act of 1934. Gladius also will file required periodic reports with the Commission. Gladius consented to the order without admitting or denying the findings.

The investigation was conducted by Laura K. D’Allaird and Marc E. Johnson of the Enforcement Division’s Cyber Unit and was supervised by Mr. Cohen.

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TokenMarket Launches UK’s First Tokenised Equity Crowdfunding Campaign

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Trading

Global investment platform, TokenMarket today announces plans to raise up to £10m via a Security Token Offering (STO). The offering, which is open to professional and self-certified investors, landmarks the first of its kind where the shares issued are represented as blockchain based digital tokens. The crowdfunding campaign is expected to take place within the Financial Conduct Authority’s (FCA) Regulatory Sandbox.

Over the last two years, TokenMarket has established itself as an industry veteran having assisted some of the most innovative blockchain companies in raising more than £240 million.

“There is a huge unmet demand for growth finance, particularly amongst tech startups. Europe has markedly failed to match the prowess of the US in nurturing technology champions that drive innovation, economic growth and job creation.

“At the same time, everyday investors are often shut off from exciting investment opportunities. We firmly believe that STOs will help to solve this dilemma by democratising access to finance whilst providing the same investor protections as traditional securities.

“As a platform we work with many exciting businesses, and we are delighted to launch our own STO, demonstrating our commitment to this revolutionary financing model,” Ransu Salovaara, TokenMarket CEO and Co-Founder, commented.

With £9m in revenue in its last financial year, the company has been completely self-funded up until this point. TokenMarket plans to use the additional funding to fully capitalise on the expected £77 billion a year market of startup and growth company financing.

Mikko Ohtamaa, TokenMarket CTO and Co-Founder, added: “Over the past 12 months, our team has been working on tokenised securities. We have designed and built an open-source platform that focuses on market transparency and security. We believe we have constructed a fully compliant yet non-custodial, blockchain-based platform that helps early-stage companies raise funding while potentially giving investors earlier liquidity.”

The TokenMarket platform, currently delivering fundraising and token issuance, is set to expand with the inclusion of its own security token exchanges in the EU and Dubai. This end-to-end approach aims to provide professional and self-certified investors with seamless access to primary and secondary markets.

The TokenMarket STO launches in two stages; a private placement for professional investors which is now open, and a tokenised equity crowdfunding campaign for self-certified investors which is expected to take place in March 2019.

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Iconiq Holding Announces the Listing of ICNQ Token for Trading on the GBX-DAX

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Crypto Expected

Global crypto asset management firm Iconiq Holding, a Sponsor Firm of GBX, announces the listing of the ICNQ token on the GBX-DAX. The Gibraltar Blockchain Exchange (GBX) is an institutional-grade, regulated and insured token sale platform and digital asset exchange. The Digital Asset Exchange (GBX-DAX) is a state-of-the-art exchange created with the high expectations of professional crypto-traders in mind. Adding to the diverse range of tokens on the GBX-DAX, ICNQ is the fifth token that has been listed on the exchange so far in 2019.

Nick Cowan, Managing Director and Founder of the GSX (Gibraltar Stock Exchange) Group Limited said, “I’m pleased to unveil the latest development in our ongoing efforts to provide the most dynamic trading experience possible, with the addition of the ICNQ token to the GBX-DAX. The Iconiq team have a wealth of experience in traditional financial markets and are acutely aware of the importance of accessibility and liquidity — two principles at the heart of our offering. Collaborations with like-minded organizations such as Sponsor Firm Iconiq, are fundamental to achieving greater recognition for our emerging industry.”

In January 2019, Iconiq Holding brought EOS to the GBX community by sponsoring its listing on the GBX-DAX. Available through Iconiq Holding, global crypto asset management firm and developer of the crypto asset management platform AMaaS, the ICNQ token powers the ICNQ ecosystem, creating a harmonic solution to digital asset management. Holders of the token gain exclusive membership to the ICO investment club and Iconiq Funds’ crypto index fund share classes. Additionally, the token is redeemable as a voucher by holders for discounts on ecosystem services.

Patrick Lowry, CEO of Iconiq Holding, the developer of the ICNQ token, said, “We are delighted to extend the reach of the ICNQ token, which is already delivering new standards of digital asset management. Bringing GBX-DAX users into our ecosystem is a natural next step for us, given our existing status as a GBX Sponsor Firm. The GBX’s secure and insured exchange allows for next level wealth generation, mirroring our own mission and efforts at Iconiq Holding.”

The ICNQ token will have trading pairs with USD, BTC and ETH to begin with, with additional pairs to be added in the near future.

The GBX-DAX is a digital asset exchange built on institutional-grade best practices and good governance, derived from the capital markets experience gained through the GBX’s parent company, the Gibraltar Stock Exchange (GSX), an EU-regulated stock exchange. With the goal of creating the most professional and secure trading environment possible, the GBX-DAX platform has been designed to be highly intuitive and easy to use while incorporating strict verification requirements to the listing of a wide range of assets.

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