The Crypto Equity

A Division of Labyrinthus LLC. Est 2015. Crypto Equity Experts. Information Does Not Constitute Legal Advice.

[thecryptoequity]

Tezos Crypto Equity Platform Rising Higher

Tezos, which styles itself as a “self-amending cryptographic ledger” and uses the so-called proof of stake consensus model, has emerged as a favourite blockchain and cryptocurrency for tokenized real-estate and security tokens.

Tezos holders, if their funds are stored in certain wallets, can “stake” their XTZ and receive additional tokens as a reward for creating and verifying new blocks in the chain.

The tezos rally, which began in November last year, has been pushed on by major partnerships with the financial world and the so-called Tezos Foundation’s Faucet, that awards users up to 0.01 XTZ every 12 hours.

https://www.google.com/amp/s/www.forbes.com/sites/billybambrough/2020/02/03/as-bitcoin-fails-to-breakout-this-minor-cryptocurrency-has-surged-by-400/amp/

[thecryptoequity]

Bitcoin Is The Fifth Most Held Equity For Millennials

At least when it comes to the United States, the performance of Grayscale's investment products can serve as an indicator of how institutional investors are viewing the cryptocurrency market.

While talking to Cointelegraph, Michael Sonnenshein, Grayscale's Managing director said:

"We saw record-breaking investment into Grayscale's family of products, illustrating continued demand from investors for digital currency access products and with a majority of investment coming from institutions, it's clear that we're experiencing institutional adoption."

Sonnenshein also said that the company's success suggests investors are starting to realize that cryptocurrency is becoming an asset class of its own with plenty of staying power:

"Investors are glomming on to this notion that this is a bona fide asset class, and it's not going away and that they can't pay attention to it."

As a company, Grayscale gives its clients the option of investing in multiple cryptocurrencies, but its flagship product is the Grayscale Bitcoin Trust (GBTC). Reportedly, this Bitcoin trust is the fifth most held equity by millenial investors. In addition to the GBTC, the company also offers altcoin trusts, for Ethereum, Stellar, Zcash, Ethereum Classic, XRP, Bitcoin Cash, Litecoin, and Horizen.

https://www.google.com/amp/amp.coincodex.com/article/6637/grayscale-600-million-institutional-crypto-investors/

[thecryptoequity]

USD $600 Million Flows Into Grayscales Crypto Investments

Cryptocurrency investment manager Grayscale saw over $600 million in inflows to its products in 2019, according to its recently released 2019 Digital Asset Investment Report. The year smashed a number of records for the company, and the 2019 inflows were greater than the combined inflows between 2013 and 2018.

Grayscale also reported that its investor base expanded by about 24% - $146.9 million of the $607.7 million total figure came from new investors. The company's existing clients contributed the remaining amount of $460.8 million.

https://www.google.com/amp/amp.coincodex.com/article/6637/grayscale-600-million-institutional-crypto-investors/

[thecryptoequity]

The Duel Token Model

Another reason for dual-token models is the regulatory uncertainty imposed by the SEC’s unclear view on whether a token can be regarded as an unregulated utility token or as a security that is subject to SEC regulation. After STOs have so far mainly been used to sell equity or investment bonds for companies outside of the core cryptoeconomy, blockchain projects are increasingly looking to issue security tokens because of their improved regulatory certainty and investor protection.

Although the SEC has explicitly stated that a security token can become a utility token, once the underlying network is sufficiently well developed and decentralized, there are no fixed rules that can be applied to determine that this is in fact the case for a specific token. As it is still very difficult to obtain them by a non-accredited investor, security tokens are not suitable as payment tokens. Hence, some projects are creating an investment token to conduct a security token offering (STO), while creating an additional utility token for payments.

https://www.google.com/amp/s/dailyhodl.com/2020/01/20/solving-crypto-dynamics-and-investor-incentives-using-dual-token-economies-in-blockchain-networks/amp/

[thecryptoequity]

The Difficulty Of Seperating Blockchain From Cryptocurrency

An adage sometimes heard by crypto pessimists is that blockchain technology has a bright future, but cryptocurrencies don’t. This notion disregards that cryptocurrency tokens and blockchains are two sides of the same coin. While there are some use cases for blockchains that do not require a token economy, such as distributed private or consortium databases, most use cases rely on the exchange of value in one form or another. In the case of permissionless blockchains, it is not possible to construct them without aligning the incentives of its users through tokens.

https://www.google.com/amp/s/dailyhodl.com/2020/01/20/solving-crypto-dynamics-and-investor-incentives-using-dual-token-economies-in-blockchain-networks/amp/

[thecryptoequity]

Crypto Equity Funds Have USD $19 Billion Under Management

might decline in importance for crypto projects and that in their place traditional investment and venture capital will become more significant.

“We have already seen a shift in the space from initial coin offerings (ICOs) and token sales to equity,” Carlos Domingo, the co-founder and CEO of Securitize, a security token platform, tells Cryptonews.com. “Venture capitalists (VCs) want to have direct ownership of companies in addition to certain rights, and the ICO model doesn’t provide this. This is why we’ve seen traditional VC investment growing as the ICOs fade away.”

However, this transition probably won’t happen immediately. "We do not expect such large investments (about USD 10 billion) in 2020 through venture funds in the area of ​​startup blockchain," ICObench’s spokesperson says.

Still, there has been a steady increase in venture capital investment in blockchain- and crypto-related start-ups over the past few years. In the first three quarters of 2018, almost USD 4 billion of venture capital was pumped into the crypto ecosystem across 384 separate deals, compared to only USD 1 billion in 2017.

Meanwhile, 2019 saw both token sales and venture capital funding taking a hit, with VC investment in crypto and blockchain amounting to USD 822 million by the middle of the year.

Still, as token sales decline or stabilize at a modest level, and as the crypto ecosystem matures, traditional venture capital is likely to grow in importance, particularly as companies increasingly produce minimum viable products. According to a study from Crypto Fund Research, the total assets under management of crypto funds (including venture funds) has risen consistently to USD 19 billion as of October.

https://cryptonews.com/exclusives/will-venture-capitalist-steal-spotlight-from-token-sales-5582.htm

[thecryptoequity]

VISA Acquiring Crypto Equity Platform Plaid For $5.3 Billion

Payments giant Visa is set to acquire Plaid, a crypto-serving fintech unicorn, for $5.3 billion.

Announced Monday, Visa said the acquisition would help it enter into new businesses and enhance its existing card business. The deal is expected to close in the next 3-6 months, pending regulatory approvals.

Plaid helps users to connect their bank accounts to apps, such as PayPal's Venmo, to conveniently share their financial information. The startup also serves crypto firms, including Coinbase and Abra wallet.

Visa would pay $4.9 billion in cash and around $400 million of retention equity and deferred equity, according to a presentation deck. The payments giant is paying a significant premium over Plaid’s valuation which recently hit over $2.5 billion.

“The combination of Visa and Plaid will put us at the epicenter of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory,” said Al Kelly, CEO and chairman of Visa.

https://www.theblockcrypto.com/linked/52914/visa-to-acquire-crypto-serving-fintech-unicorn-plaid-for-5-3b

[thecryptoequity]

A Token Die Off

I expect the SEC will continue to find their teeth, building precedent on top of precedent.

As we saw with Shopin, they will likely keep referring criminal charges for issuers. A standard template will emerge: full rescission, fines, permanent bans from the securities industry. It’s possible that many issuers are waiting for the resolution of the Kik/Kin case to make the final call.

If that case is decided in 2020, it could trigger an immediate wave of settlements.

Launching a presold base-layer protocol from scratch will prove virtually impossible. Some of the more high-profile sales will lobby intensely for a safe harbor, and they may even get it. This is one of the most permissive SECs in living memory, after all.

But the marginal projects will face the wrath of a securities regulator, which is well and truly sick of hearing about crypto. If I had to guess, I’d expect that the SAFT will finally be challenged. I am not sunny about its prospects.

The increased pressure on exchanges listing these assets will accelerate the die-off, as their liquidity is cut off.

https://www.theblockcrypto.com/post/51353/nic-carter-on-what-2019-meant-for-crypto-and-what-2020-might-bring

[thecryptoequity]

The Inaugural Block Trade

According to the announcement the Bakkt Bitcoin Options settle into the underlying BTC monthly futures contract two days prior to expiry. Galaxy Digital Trading and XBTO executed the inaugural trade. A block trade is defined as a privately negotiated trade with a certain minimum size threshold.

The primary difference between futures and options is that the contract holder is obligated to sell a futures contract on the expiry date. With options there is no obligation to sell the contract on expiry, giving greater flexibility which may impact market prices.

The report added that price discovery is completely regulated and has no exposure to unregulated bitcoin spot markets which can vary greatly from exchange to exchange during times of peak volatility.

President of ICE Futures US, Trabue Bland, stated;

“Based on our benchmark physically delivered bitcoin futures, these options contracts offer our customers a capital-efficient new tool for trading and for managing volatility, price risk and income generation,”

https://bitcoinist.com/bitcoin-options-ice-announces-completion-first-block-trade/

[thecryptoequity]

One Of The Worlds Largest Banks, RBC Is Opening A Cryptocurrency Exchange

The Royal Bank of Canada (RBC), the Canada-headquartered major global bank, is set to open a cryptocurrency exchange, according to a report from The Logic.

The media outlet claims it has learned that the RBC wants to allow customers to trade in cryptocurrencies such as Bitcoin and Ethereum for investment purposes, as well as providing a platform for in-store and online crypto purchases.

The bank also reportedly plans to include offering customers cryptocurrency bank accounts, although the media outlet says RBC has not responded directly to request for comments about the proposed exchange launch.

RBC has registered four cryptocurrency banking-related patents in the United States, and has been exploring possible blockchain technology banking applications since 2017.

https://cryptonews.com/news/banking-giant-with-16-million-clients-rbc-goes-crypto-report-5050.htm

[thecryptoequity]

By 2020 50% Of Investors May Prefer Innovative Security Tokens To Traditional Equities

Online investment platform BnkToTheFuture will expand its security token offering (STOs) business to the U.S with an investment in a Securities and Exchange Commission-licensed broker dealer.

Announced in a Nov. 7 statement to investors, BnkToTheFuture acquired an undisclosed stake in BMI Capital International’s holding company, which enables the lending platform to offer STOs to the U.S. market.

In an email to CoinDesk, BnkToTheFuture CEO Simon Dixon said:

“We forecast by 2020 up to 50 percent will opt for an innovative security token that improves the potential for returns for investors over traditional equity. We are aiming to build a new industry and asset class.”

Launched in 2010, BnkToTheFuture is a Cayman Islands-based platform that allows accredited investors to raise equity for financial technology and crypto companies.

Since opening STO investments in 2019, it’s launched two security tokens, including the Bitfinex hack recovery token convertible to Bitfinex equity, and the Lottery.com revenue share token. Dixon said three more offerings are scheduled for 2020 and the platform has brought 450 individuals to invest in STOs.

All three strategic investments or acquisitions BnkToTheFuture made this year were to expand its STO business, Dixon said, including an investment in Altcoin.io, which will support a security token exchange to launch in 2020.

https://www.google.com/amp/s/www.coindesk.com/bnktothefuture-ceo-50-percent-of-funding-will-be-through-security-tokens-in-2020%3famp

[thecryptoequity]

Confidence In The Crypto Market Future

Dan Matuszewski remembers the early days of cryptocurrency trading, just a handful of years ago. It wasn’t the possibility of a market correction that worried him. It was the risk that the whole business might disappear.

“There was always a non-zero chance that bitcoin would gap down, die, and never come back,” Matuszewski, 31, said in a phone interview.

Matuszewski, who previously oversaw trading at the cryptocurrency-focused financial company Circle, says he’s now confident enough in the market’s future that he’s teamed up with two partners to pool more than $10 million to start a proprietary-trading firm. They are Bobby Cho, 35, former head of trading at brokerage firm DRW’s Cumberland crypto unit, and Julien Collard-Seguin, 31, a former technology executive at Circle.

According to Cho, the new company, called CMS Holdings, started trading in October. The business is registered in the Cayman Islands and doesn’t manage money from outside investors, he said.

“We deploy strategies much like a hedge fund in the market, except that we’re not structured as such,” Cho said.

The plan is to put 30 percent of the firm’s money into highly liquid cryptocurrencies like bitcoin and ethereum and 40 percent to 50 percent into less-frequently traded tokens and digital assets, Cho said. The rest would likely go into long-term equity investments in the crypto industry, he said.

https://www.google.com/amp/s/www.coindesk.com/former-cumberland-and-circle-traders-pool-money-for-crypto-prop-trading%3famp

[thecryptoequity]

Ember Fund Seeks To Raise $1 Million For Its Crypto Equity App

Ember Fund, makers of an AI-managed cryptocurrency portfolio app, is seeking to raise up to $1 million through a Securities and Exchange Commission-registered securities sale.

The year-old company revealed their intention in today’s filing with the SEC, detailing their sale of “Crowd SAFE” securities that will occur through the end of January 2020 on Republic, an online startup investment platform. SAFE stands for “simple agreement for future equity;” it is an investment contract entitling holders to equity if and when Ember Fund is acquired or goes public. Investors must post a $100 minimum buy-in.

Ember Fund markets itself as an app-based equivalent to crypto hedge fund, with an automated AI system re-balancing a portfolio of cryptocurrencies. Ember is not itself a hedge fund, however; as a non-custodial service Ember Fund never actually touches or transmits crypto – all coins remain on users’ phones.

In May, Ember Fund CEO Alex Wang told CoinDesk that the service, that he and two others bootstrapped in 2018, saw nearly $2 million in transactions in April 2019.

https://www.google.com/amp/s/www.coindesk.com/ember-fund-seeking-to-raise-1-million-in-sec-registered-offering%3famp

[thecryptoequity]

Telegram Releases Desktop Wallet For It’s Gram Token

Telegram has released an early desktop wallet for its “gram” token, allowing users to download the test app for MacOS, Windows and Linux 64 bit.

“Now you have a wallet only you control – directly, without middlemen or bankers,” the app says, according to CoinDesk.

The company had planned to release its blockchain project, TON, until the company was sued by the United States Securities and Exchange Commission (SEC), which declared grams were unregistered securities. As a result, Telegram has agreed not to launch its TON blockchain project and gram issuance until April 30, 2020, with its hearing with the SEC pushed back until February.

In other news, one year-old Ember Fund, creator of an AI-managed crypto portfolio app, wants to raise as much as $1 million through an SEC-registered securities sale.

https://www.google.com/amp/s/www.pymnts.com/blockchain/bitcoin/2019/bitcoin-daily-telegram-blockchain-startup-pilots-crypto-wallet-ember-crypto-portfolio-app-looks-to-raise-1m-in-securities-sale/amp/

[thecryptoequity]

Blockchain For Decentral Space Endeavors

SpaceX president and COO Gwynne Shotwell said last Friday that the spacecraft manufacturer wants to land its Starship on the moon within three years, and carry out a manned mission soon after. This would mark the first major launch from a privately owned space company. The private spaceflight industry is growing fast; estimated to be worth $1 trillion by 2040. But as it grows, some see an opportunity for blockchain technology to shake up a status quo that’s dominated by nation states and large companies.

Just this month, Consensys (which funds an editorially independent Decrypt) announced plans to track space debris using the Ethereum blockchain. And last month, SpaceChain received funding from the European Space Agency to build a blockchain-based satellite network. Their claims are as ambitious—and vague—as here on Earth: blockchain will “decentralize space endeavors” (Consensys), or build a ‘‘community-based space platform.

https://www.google.com/amp/s/decrypt.co/10973/how-blockchain-is-powering-the-new-space-race%3famp=1

[thecryptoequity]

The Banks Tokenized Money

"Tokenized money is essentially implementing regulated money in a bank or electronic money transfer industry or a central bank... but doing that on top of smart contracts on a blockchain construct," he said. "There's also the possibility to put that money on hold...while you do a financial process such as clearance of payments like paying for securities.

"It's just a bank using another technology to issue money," Faura added. "And, we don't need a new regulatory framework to do that."

https://www.idginsiderpro.com/subscribe/

[thecryptoequity]

The Token Taxonomy Initiative

The Token Taxonomy Initiative (TTI) was first announced in April.

The participants sought to create a non-technical, standard definition of what a token is, and to establish a common set of terms and definitions for cross-industry business use without employing industry jargon or coding.

“In practical terms, a business user or consortium can select a base type of token and choose from contributed lists of behaviors and properties and assign them to the token, just as you might drag and drop icons on a screen," said Marley Gray, Microsoft's principal architect for Azure blockchain engineering and a member of the EEA's board of directors. "The framework enables a business person to create a token visually using a design tool without writing any code whatsoever and allows them to tell developers, ‘I want one of these."

https://www.google.com/amp/s/www.computerworld.com/article/3451576/ibm-intel-jp-morgan-and-microsoft-join-others-on-new-blockchain-token-spec.amp.html