Cypherstreet Securities Week – Volume 13 – January, 4, 2020

This is the 13th 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.

"GMO Internet to Launch Stablecoin in Q2 2020"

Earlier this week, one of the largest companies in Japan, GMO Internet made an announcement that the company will launch a stablecoin in Q2 2020. "Discussing the use of these tokens, company officials stated that their primary use will be to facilitate borderless trading, payments and remittance. In turn, the token will help further promotions and enhanced market liquidity." This is a company that has been around since the beginning of the internet, starting back in 1995, so they understand the benefits of utilizing technological innovation. This comes in addition to many other Japanese companies getting involved in the blockchain space, so it will be very interesting to monitor the region throughout 2020 to see what other innovations emerge. article on this recent development by GMO Internet, as well as other blockchain initiatives in Japan.

"Kadena Blockchain Set for January Launch"

JP Morgan's blockchain wing Kadena has announced an official launch date for January 15th and this may be big news for the financial industry as their goal is to streamline the entire investment process. "The platform enables the firm to keep the records of the actual blockchain transactions public. In this way, traditional financial institutions such as JP Morgan can take advantage of the increased efficiency blockchain technology provides without fear of compromised client information." With a blockchain boasting 750 transactions per second, if Kadena succeeds with their goal this will provide a much needed boost to efficiency in the markets. They plan to have a hybrid blockchain - both public and private in order to control the flow of information. Here's a link to the full article on this development by Kadena and JPMorgan that dives into more detail on exactly what this hybrid blockchain will offer.

"NY Court Orders Telegram to Produce ICO Documents Ahead of CEO's Deposition"

The battle between the SEC and Telegram continues as Telegram was recently ordered by a judge to explain why they should not have to turn over financial information regarding their disputed $1.7 billion ICO. As stated in the SEC letter to Telegram, "Defendants' refusal to fully disclose and answer questions about their disposition of the $1.7 billion they raised from investors is deeply troubling." This directly correlates to records related to the "efforts of others" section which is used in the Howey Test by the SEC to confirm if a financial product is a security. This all has to do with the claim by the SEC that Telegram's ICO "constituted an unregistered securities offering" and is a clear-cut example of how important it is to follow these regulations closely. It will be interesting to monitor how this case pans out for Telegram and if it will have any implication on current SEC regulations involving securities offerings. Yahoo article on the continued coverage centered around the SEC vs Telegram case regarding their $1.7 billion ICO.

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.

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