Published Juli 12, 2019 on Hackernoon.com and Altcoin-Magazine and Medium.com and Thetokenizer.io and Blockchain4innovation.it
The FATF (Financial Action Task Force) has recently issued a new set of guidelines which are applicable to the crypto sector, mainly with regard to Virtual Assets (VA) and Virtual Assets Service Providers (VASPs). But let´s bring some order into something that might otherwise be slightly confusing and which implications have generated some degree of alarm in the crypto community.
What is FATF
This financial task force was created back in 1989 by the then G7 ministries to set standards and promote the implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is not a legislative body...
The latest news are that Block.one, the developer behind crypto-token EOS, will use some of the record US$4 billion it raised in the 2018 ICO to buyback - in a private deal - at least 10% of Block.one´s shares from early investors. According to Bloomberg, which released the news, this will value the company at a record US$2,3 billion from the US$40 million evaluation of its seed round in 2017.
More details about who are the fortunate shareholders who will benefit from a stellar 6,657% return in 1 year are not known, nor are the modalities of the buyback.
After a long winter the optimism is back in the crypto world. Sure enough I also share this widespread feeling... though for mostly different reasons.
So which are the real reasons behind the recent crypto run up?
Investors have pointed to the Chinese fearing capital controls and to a general flight to safety because of the global geo-political tensions. Although both motives may well be (temporary) concurring reasons - which incidentally also increases the risk for short term speculative spikes and painful wash-outs - my optimism never faded in this long winter and it is much more long term based because it lies with fundamental factors.
Simply, it is the institutional money - increasingly attracted to the sector - which drives the growth and will continue to do so.
The time is ticking. On 21st of July 2019 the new Prospectus Regulation (2017/1129) will become applicable in all the EU member states. This regulation will repeal the previous Prospectus Directive 2003/71/EC and introduce a new set of important provisions which may just well be the boost needed by the crypto sector to launch intra EU public offerings of security tokens (STOs).
This new regime was conceived with the purpose of allowing SMEs easier and cost effective access to capital markets across the EU. The regulation enters into force in two different phases...
Nowadays, tokenized securities are the hottest crypto topic. Of all possible tokenizations - debts, real assets or equities - that of equities catches the most interest. This despite the fact that it is really debt tokenization that presents the "low hanging fruit", because it is fairly straightforward to implement and it has very little regulatory constraints. In fact, the first EU debt tokenization was recently completed in Germany.
Instead, the tokenization of equities is much more complex due to the amount of regulatory constraints...
Lastly it happened: a German company has won the race to issue a fully regulated security token, at least in Europe. Despite others having claimed to have "tokenized" something in the past, this Bitbond issue is a radical shift in the STO narrative so far.
Indeed Bitbond - a Berlin based crowdfunding company - has released a prospectus approved by German regulator BaFin to raise funds by issuing a security token bond on the Stellar blockchain, without a depositary bank, without certificates or coupons and intermediaries. Differently from what happens with traditional bonds, no commission/premium/agio will be charged to subscribers.
© 2017-2018-2019 - Andrea Bianconi - All Rights Reserved
Please note that all the material published on this web site is protected by applicable copyright laws. You may copy, reproduce or repost my articles on the condition that the author and the source of the article is properly mentioned/quoted and linked.