Can Security Tokens Save Crypto From the Bear Market Blues?
"The security token stores the password."
That's what Trevor Koverko, CEO of Polymath, the encryption project, told CoinDesk at the block chain technology festival in Toronto this week. Despite the bear market in August, when bitcoin and ether prices fell below $ 6,000 and $ 300, respectively, tokenized dividends were a topic of the week.
But Koverko was far from his view alone. Crypto startup Alan Wunsche, CEO of TokenFunder and co-founder of industry consortium Blockchain Canada, told CoinDesk that the tokenized assets are the future of the capital market.
From Fintech Canada to the Blockchain Futurist Conference, Canadian regulators have received a lot of feedback from regulated startups on how to allow to sell tokenized securities to individual investors and institutional investors. It exposes a lot of risks.
Last Thursday, Polymath even announced a startup that would release security tokens through the block chain marketplace. In addition, CORL, the initiator of the announcement cohort, plans to distribute monthly revenues directly to investors' ethereum purses through smart contracts. TokenFunder used the same approach as the regulatory agency-approved token sales in April.
Koverko said the tokens are separate from "dangerous" trading assets such as bit coins and he said he now believes that "anything" is backed up by speculative value that real regulators can not measure. However, he is the first to suggest that token ventures and bitcoin projects are culturally and legally dissipating.
Eric Lombrozo, Bitcoin core developer, is concerned that the cryptocurrency movement will develop his sovereignty, but the token project focuses on tokenizing equity and physical goods.
Koverko said adding the enormous amount of new investment proposals is exciting in a unique way: "This is not about the technical cypherpunk movement, but about succumbing to people." We doubled the security token market overnight. "
Canadian parliamentarian Dan Albas said in an interview that lawmakers are considering cryptanalysis while reviewing regulatory standards related to money laundering checks. He is expected to have more customer requirements for a Canadian bit coin project.
He told CoinDesk:
"You can not argue that you can not have a copy and photos of someone's scanned driver's license and know the customer.We need to bring Canadian financial industry norms and standards to make more choices in the market, He said.
But not everyone is involved in efforts to institutionalize the block-chain scene in Toronto.
Crypto veteran Joseph Weinberg, co-founder of Starty Shyft, a digital identity solution that Polymath is partnering with token services, said over-regulation could "kill the entire ecosystem."
Lessons from Ether
It is wise for the panelists to remind them of Toronto's cryptographic history lessons.
Toronto was the birthplace of Ethereum, but Albas speculates that the Ethereum Foundation was founded in Switzerland. The jurisdiction is due to a more generous tax and regulatory obligation. So many people think that the regulatory frenzy that is now sweeping Canada can make or break Toronto's future as an open source community hub.
"I think a lot of people actually live in Toronto," Albas said. "The signal to me is that there is something in the Canadian system that does not promote their growth dreams."
Albas said he hoped fellow lawmakers would ask whether another approach to Ontario's policy is actually helpful to the public. Albas will face tough battles, though he would prefer minimal oversight as a conservative member of the House Finance Committee.
In addition to providing advice to foreign regulators, Weinberg, working with local regulators, explained that the draft of the new proposal proposed by the Canadian Financial Transaction and Analysis Center is "madness" that could "spoil" the local block-chain industry.
According to the draft guidelines, we were required to start a startup that was worth more than $ 10,000 to comply with stringent standards, so we handed out indiscriminate customer data to regulators on a regular basis. The rebellion of the cryptographic community has forced lawmakers to reconsider these measures.
Meanwhile, Weinberg is cautiously optimistic about the prospects for innovation in the cypherpunk and agency block chains in Toronto. Weinberg said the Canadian competitors are more likely to work with local scenes compared to Silicon Valley or New York City. He told CoinDesk:
The most interesting thing about Canada and Toronto is that Canada is too small to work together. "
Image of CoinDesk's Leigh Cuen
CoinDesk, a leader in block-chain news, is a media outlet that pursues the highest standards of journalism and adheres to strict editorial policies. CoinDesk is an independent operating subsidiary of the Digital Currency Group, which invests in cryptocurrencies and block-chain startups.
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