Cypherstreet Securities Week – Volume 12 – December, 28, 2019

This is the 12th post for the weekly series on the state of securities with a focus on fintech, Bitcoin, blockchains & distributed ledgers.

Here are some of the key developments, stories & updates from the digital securities industry over the past week.

"SEC Fines BCOT $250,000 + $13 Million Return"

This month the SEC announced a settlement with Blockchain of Things INC (BCOT) centered around their 2017 ICO. As part of this, the company agreed to a payment of $250,000 for an unregistered ICO, which is yet another example of the SEC going after the fraudulent companies that did not follow regulations for their ICO in 2017-2018. They will also need to return the $13 million that they raised back to investors. The SEC did not completely shut down BCOT for future offerings, they just need to be sure to follow all regulations when doing so. Regulations are not going anywhere in 2020, they are here to stay and it is very important for firms that get involved in the space to follow all of these regulations. article on this recent settlement between the SEC and BCOT.

"Project Sanddollar: A Bahamian Payments Systems Modernization Initiative"

On Tuesday December 24th, the Central Bank of the Bahamas announced that they will be introducing a digital version of the Bahamian dollar, starting with a pilot phase this month. The project titled Project Sand Dollar is a continuation of the Bahamian Payments System Modernization Initiative which began in the early 2000s. As stated in the release, "Most of the benefits of introducing a digital currency are still unquantifiable. However, they include a potential suppression of economic costs associated with cash usage, and benefits to the Government from improved expenditure and tax administration systems." It will be interesting to monitor this development throughout 2020, as The Bahamas are moving forward with a pilot of a digital version of their dollar. Full press release from the Central Bank of the Bahamas can be found here.

"Brokerage Firm Tokai Tokyo Invests $4.6 Million in Huobi Japan"

Tokai Tokyo Financial Holdings is one of the oldest securities firms in Japan, first opening back in 1908 and they now have $39 billion AUM. On December 26th, Huobi Japan announced a $4.6 million investment from Tokai which will be used to support continued expansion in the digital asset space. Tokai issued this statement about the investment, "The financial business using blockchain technology has advanced rapidly in recent years with the application area of crypto assets and Security Token Offering expanding globally. Here in Japan, the relevant ministerial ordinances are expected in force next spring." One of the oldest securities firms in Japan understands the impact tokenization will have on the industry and they are investing accordingly. Full Tokenist article explaining in more detail this investment by Tokai into Huobi Japan.

"Blockquake Launches Beta Platform"

Digital asset exchange Blockquake has announced this week that they have conducted a successful launch of their Beta platform. This is a noticeable development as they are very focused on the regulatory side of Security Token Offerings. Earlier this month, their CEO Antonio Brasse stated, "Bottom line, if any exchange has security tokens or tokenized securities (in the true legal sense) trading, they should also have a globally recognized audit firm. If they don't run away from them." This is an exchange that is very focused on regulatory requirements, as they are currently pursuing a broker-dealer license as well as a New York State Bitlicense. It'll be interesting to monitor their growth throughout 2020 to see the impact they may have on Security Token Offerings (STO's). Full article by Crowdfund Insider regarding this development by Blockquake launching the testing of their Beta platform.

That's all for this week, check back in next week to learn all about what's happening in the rapidly evolving digital securities industry! Feel free to leave any comments below & if you're interested in following this weekly roundup be sure to click on "Notify me of new posts by email" underneath the comments box below to receive an alert for each new post.

Leave a Reply