German Serial Entrepreneur Marvin Steinberg Discusses the Benefits of STOs

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German Serial Entrepreneur Marvin Steinberg Discusses the Benefits of STOs
Though ICOs have already lost their positions, STOs, being regulated and more secure, are still here. Marvin Steinberg has shared his vision on the benefits STOs can bring to investors.
German Serial Entrepreneur Marvin Steinberg Discusses the Benefits of STOs

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Source: CoinSpeaker

Block.One Vs SEC – How EOS’ Parent Company Got Away With a Small Fine For its Unregistered ICO

EOS’ parent company, the Block.One was in the soup with the US SEC for conducting an unregistered Initial Coin Offering (ICO) in the US. While the crypto community was expecting the SEC to impose several penalties on the company, Block.One was let off rather lightly with just a $24 MM fine. Katherine Wu, former Director of Business Development at Messari, and the current Principal at Notation Capital have dissected Block.One’s settlement with the SEC to reveal that the key to getting away with violating SEC’s regulations is “be cooperative”.
Katherine Wu’s Take on the Waiver Letter from EOS’ Lawyers to SEC
The SEC had proposed a “Cease and Desist” order against Block.One for violating SEC’s regulations and conducting an unregistered Initial Coin Offering (ICO). The proposed order could have led potentially forced Block.One to put a stop to their operations.
The letter that was sent from EOS’ lawyers to the SEC sought “a waiver of any disqualification that will arise under Regulation A and Regulation D with respect to Block.one or any of its affiliates as a result of the entry of the Proposed Order.” The letter admits that the Block.One’s activities violated sections 5(a) and 5(c) of the Securities Act as the company sold unregistered securities to US-based persons.
But, the letter also points to the fact that the proposed order had described “activities that involve the offer and sale of a security, but do not involve a criminal conviction or a violation of any anti-fraud statutes – scienter or nonscienter based”. Therefore, “Block.one will not be held to a “greater” burden under the Division’s waiver policy”. According to Katherine Wu, this is a big win for EOS as the SEC said that there was no fraud or criminal conviction in the sale.
Source: https://static1.squarespace.com
The letter further explains how Block.One ensured the “Responsibility of Conduct”. It first explains how Block.One tried to disable US-based persons from purchasing the ERC20 tokens by using “geoblock” to prevent anyone with a US-based IP address from buying tokens on the EOS.IO website. It also stated that the company had made it clear in their purchase agreement that US-based persons were prohibited from buying the ERC20 tokens in the token sale, and that those purchasing the tokens had to establish that they were not US residents.
Then the letter tried to establish how Block.one had try to fix the damage done. The letter says that Block.One has hired new executives after the token sale – its new Chief Legal Officer, Chief Financial Officer and current General Counsel are “primarily responsible for ensuring compliance with securities laws generally and Regulation D or Regulation A specifically”. The letter also reveals that the members of the executive committee have been “educated by experienced outside securities counsel on procedures required for compliance with securities regulations generally and Regulation D specifically”.
Further, the letter elaborates on how Block.One’s team members are working towards ensuring legal and regulatory compliance. Wu takes a dig at Block.One by saying that it is trying to show that “there are grown-ups are EOS today.”
After establishing the strength of the EOS team, the letter tries to convince the SEC that its intention is to digital assets that are true cryptocurrencies and ensure that they are fully compliant with the requirements of the US securities laws. Block.One says that with a special reference to the Voice platform which it started on the EOSIO blockchain software in June this year.
“If the Voice tokens or any future digital asset developed by Block.one are made available to U.S.-based individuals by Block.one, or if Block.one allows for distribution or transfer of any such digital asset to U.S.-based individuals, Block.one has engaged and will continue to engage experienced U.S. securities counsel to work with its internal legal and compliance team to consider and apply such guidance in structuring the Voice platform, designing any distribution of the Voice token and managing public statements by Block.one.”
The letter repeatedly emphasizes on how it will not repeat its previous mistakes again – it will work closely with its securities counsel in any activities involved with Regulation D. Wu says that this is how Block.One got away with just a $24 MM fine – by being “cooperative”.
Block One’s Billion-dollar Fund
Next, the letter talks about how Block.One and third parties would be affected if the waiver was denied. It shares that a $1 Bn from the Token Distribution proceeds has been allocated towards offering “developers and entrepreneurs the funding they need to create community-driven businesses leveraging EOSIO software”. It further tries to convince the SEC that the denial of the waiver will lead to an inability of the company “to deploy capital for investment in securities issued by U.S.-based small businesses and growth-stage companies”. The same would not be beneficial for Block.one’s shareholders “as capital may be forced to sit idle rather than being deployed to growth-stage technology companies across the globe”.
However, the company also shirks off responsibility for delivering products that can be deployed. The letter says –
“Block.one is a growth stage company focused on developing novel, innovative technology. Block.one has spent and will spend large amounts of capital to invest in the research and development of new technology, but as in any R&D program, it is possible that many of these efforts may never be deemed viable for deployment.”
Block.One also stresses that disqualification from reliance on Regulation D will also limit the company’s fundraising options. According to the letter, the denial of the waiver is likely to be disadvantageous to Block.one as it will hinder “strategic growth partners, technology partners or acquisition targets that are essential to Block.one continuing to innovate, grow, support the EOSIO blockchain software and create value for its shareholders”.
Finally, the letter arrives at the request for a waiver from the disqualification of Block.one from relying on Regulation A and Rule 506 of Regulation D. The letter says that it is not “necessary”.
Source: https://static1.squarespace.com
The SEC Settlement
Block.One’s lawyers undoubtedly did a good job with convincing the SEC of the importance of letting go off Block.One without a harsh penalty.
The order mentioned various instances of Block.One’s violation of the laws. First, it mentioned that EOS has not ascertained from purchasers of tokens on the EOS.IO website if they were US-based persons or not. Secondly, it pointed to the fact that Block.One had actively marketed its ICO in the US. Block.One had participated in many conferences in the US, including a major one held in New York on May 2017, and marketed its ICO in the conferences. The company had also advertised EOSIO on a billboard in the Times Square around the same time. The EOS website, its white paper, social media handles, promotional statements, etc. were available to US-based persons.
Thirdly, during the token sale, the tokens were listed on many trading platforms that were available to US-based persons as well, and Block.One did not try to “prevent the ERC-20 Tokens from being immediately re-sellable to U.S.-based purchasers in secondary market trades”.
The order also described how the purchases of Block.One’s ERC20 tokens could have reasonably expected that they would profit from the efforts of the company. Firstly, Block.One was raising funds to build a profitable enterprise and it was easy for token holders to understand that if the company was successful in doing so, they would profit from the tokens.
Secondly, purchasers of tokens would have understood that Block.One was a for-profit entity. Thirdly, Block.One had announced the billion-dollar fund that it had allocated to help initiatives that “returned value to the network.” This could also be assumed as third-party efforts in aiding the growth of EOS tokens.
Fourthly, Block.One had “actively engaged U.S. purchasers and potential U.S. purchasers on social media, online message boards, and other outlets”. In marketing the EOSIO software, Block.one had also influenced US-based purchasers to rely on the expertise and vision of the EOS founders “to secure the widespread adoption of the EOSIO software and anticipated launch of one or more EOSIO blockchains”.
The order then established that in doing all of the aforementioned things, Block.One had violated section 5(a) and section 5(c) of the Securities Act. In simple words, it had offered unregistered securities to US-based persons.
However, despite having a very strong case against Block.One, the SEC let the company off with just a $24 MM fine and a warning to not engage in any violations of Section (a) and Section (c) of the Securities Act in the future. The $24 MM will be transferred to the general fund of the US Treasury.
SEC’s Decision Leaves Community Bewildered
The light penalty that Block.One has been given has left the crypto community bewildered with many questions. As Katherine Wu stated, perhaps, companies can get away with violations simply by being “cooperative”.
Marco Santori, the President and Chief Legal Officer also shared his analysis of the SEC order which seemed to suggest that the SEC had not looked at all the aspects of the token sale. According to Santori, the SEC had focused on the intermediary ERC20 token and not on the native EOS token which was ultimately launched on the blockchain. Secondly, Block.One’s token raised money from global investors, while the SEC was concerned only with US-based investors. The small fine amount could have been calculated on the basis of the money Block.One raised by US investors. The complete analysis can be found here.
Eric Voorhees, the CEO of Shapeshift.com tweeted that the most important part of the SEC settlement was the way the pre-product, pre-launch token and the post-product, the post-launch token was treated.
Source: Twitter
Crypto Researcher Larry Cermak took a dig at the SEC with his OP-ED piece titled “Don’t ask for permission, hire good lawyers and then ask for forgiveness”.
What do you think about SEC’s decision on EOS? Should EOS have been given a harsher penalty? Has the SEC done the crypto community a favor by not clamping down EOS’ operations? Share your views with us in the comments below!
The post Block.One Vs SEC – How EOS’ Parent Company Got Away With a Small Fine For its Unregistered ICO appeared first on Coingape.
Source: CoinGape

BitPAC, a Political Action Committee, Launches ICO to Support US House Candidates

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BitPAC, a Political Action Committee, Launches ICO to Support US House Candidates
Recently a political action committee (PAC) BitPAC announced that they are going to conduct an initial coin offering (ICO) to support the candidates for public office. By donating, participants will receive Politicoins in return.
BitPAC, a Political Action Committee, Launches ICO to Support US House Candidates

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Source: CoinSpeaker

China’s Central Bank Focuses on Development of Its Own Virtual Currency

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China’s Central Bank Focuses on Development of Its Own Virtual Currency
China’s Central Bank now wants to develop a virtual currency to compete with the recently unveiled Facebook’s Libra aiming to gain the lead in the development of the cryptocurrency and blockchain technologies.
China’s Central Bank Focuses on Development of Its Own Virtual Currency

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Source: CoinSpeaker

Zambian SEC Warns Investors About Scam Cryptocurrency Investments

The Securities and Exchange Commission of Zambia has issued a caution to the public to beware of scammers operating cryptocurrency investment advice services. The financial regulators received information about a company called KWAKOO that was pushing an initial coin offering with dubious future price predictions.
The nation’s SEC has stated that the firm is not registered with it and is therefore not qualified to give financial advice about securities. It reminds the public that only companies approved by the regulator may issue such investment advice.
Cryptocurrency Investment Advisers In Breach of Zambian Securities Act
The Zambian SEC has stated that KWAKOO’s promotion of the initial coin offering for the cryptocurrency Onxycoin was in violation of the Securities Act, No. 41 of 2016. According to a report in domestic news publication Lusaka Times, the company was advising clients to invest in various Onxycoin packages.
Those behind KWAKOO are believed to have told would-be investors to expect gains of 1,000 percent by June 2021. The head of the regulatory body, Philip Chitalu, told the publication that any person promoting or providing investment advice for assets deemed as securities must either be registered with the SEC or be exempt from the law as per the Securities Act.
Chitalu went on to state that the kind of presentations and advice provided by KWAKOO qualify as investment advice under the nation’s financial regulations. He added that since KWAKOO was not registered with the SEC, it fell foul of the Securities Act and was thus acting unlawfully in promoting the Onxycoin cryptocurrency.
Finally, Chitalu stated that SEC’s role was to protect investors from dubious claims such as those made by KWAKOO.
KWAKOO and Onxycoin themselves are closely tied. The CEO and founder, apparently Sir Anthony Saint according to Onxycoin’s Facebook page, posts many of the updates about the cryptocurrency on the social media site. However, that’s not all about Onxycoin that sounds more than a little dubious.

The project’s website is completely focused on how Onxycoin holders can make returns on their investments. There is little information about what makes the coin different from the thousands of other cryptocurrencies out there other than perks for investing early.
In terms of an overall project description the website’s landing page offers only:

“OnyxCoin is one of the most transformative technologies since the invention of the Internet. OnyxCoin stands firmly in support of financial freedom and the liberty that Bitcoin provides globally for anyone to voluntarily participate in a permissionless and decentralized network.”

The real red flag, however, is the referral bonus. An absolute hallmark of a classic ponzi scheme:

“OnyxCoin Affiliate program was structured provide value to all those who participate in our Public Sale. 35% of the money collected through our OnyxCoin Public Sale will be paid back to investors through our Referral and Binary Earnings. By leveraging your networks, you can get instant earnings with our platform.”

Related Reading: Is Largely Unbanked Africa Primed for Bitcoin Adoption?
Featured Image from Shutterstock.

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SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token

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SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token
The U.S. Securities and Exchange Commission (SEC) has approved the first-ever Ethereum token sale from blockchain-based gaming startup Pocketful of Quarters (PoQ).
SEC Clears Blockchain Gaming Startup Pocketful of Quarters to Issue ‘Quarters’ Token

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Source: CoinSpeaker

IEO: the Replacement for ICO Raised a Total of 262 Million in 2019

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IEO: the Replacement for ICO Raised a Total of 262 Million in 2019
Though only half of the projects that participated in IEO in 2019 were profitable, the research indicates that the cumulative returns to be garnered over the span of 6 months could amount to 44% ROI.
IEO: the Replacement for ICO Raised a Total of 262 Million in 2019

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Source: CoinSpeaker

Tips to Maximize Returns from Cryptocurrency Investments

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Tips to Maximize Returns from Cryptocurrency Investments
Check out a number of things you can do to mitigate the risks and increase your profits from cryptocurrency investments.
Tips to Maximize Returns from Cryptocurrency Investments

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Source: CoinSpeaker

France’s Autorité des marchés financiers gives green signal for ICOs

Recently, Malta and Belarus accepted and legalized ICOs. It now seems that France will be joining the bandwagon too. According to reports, the French government is exploring the realms of ICO and other related services in the country. France’s Autorité des marchés financiers is now prepared to license crypto-firms to raise initial coin offerings. However, […]
The post France’s Autorité des marchés financiers gives green signal for ICOs appeared first on AMBCrypto.
Source: AMB Crypto

Crypto Exchange CoinFLEX to Launch Its First Initial Futures Offering for Polkadot’s DOT Tokens

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Crypto Exchange CoinFLEX to Launch Its First Initial Futures Offering for Polkadot’s DOT Tokens
This will be for the first time that any crypto platform is launching futures contracts for pre-launched assets. Each DOT token is available at $75 and can be purchased using CoinFLEX’s native FLEX tokens.
Crypto Exchange CoinFLEX to Launch Its First Initial Futures Offering for Polkadot’s DOT Tokens

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Source: CoinSpeaker

How to Run a Successful Security Token Offering in Compliance with New SEC Guidance

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How to Run a Successful Security Token Offering in Compliance with New SEC Guidance
With this tremendous growth and the widespread availability of crypto technology, STOs may soon be a viable way for most companies to raise revenue. However, some aspects of the STO bear a bit of explaining beforehand.
How to Run a Successful Security Token Offering in Compliance with New SEC Guidance

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Source: CoinSpeaker

For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+

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For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+
SEC, for the first time ever, approved a $28 million Reg A+ offering for decentralized Internet company Blockstack. The company will begin selling the SEC-approved tokens, essentially an investment vehicle for fundraising, as of today.
For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+

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Source: CoinSpeaker

Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei

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Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei
One of the emerging blockchain firms in the space, Maxonrow, views the growth of blockchain in Southeast Asia as an opportunity to set a precedent of cooperation between government agencies and blockchain enterprises.
Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei

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Source: CoinSpeaker

A Second Chance With Ethereum For Those That Missed the Bitcoin Boat

There is no stopping Bitcoin at the moment as the king of crypto keeps heading skywards. As BTC touched $13,000 today many are asking ‘am I too late to get in’. The long term answer is clearly a no, but there are still good gains to be made on Ethereum if it repeats the performance from 2017.
Ethereum Still Undervalued
Bitcoin may well be up 240 percent this year and hitting new highs every day this week but all is not lost for those that think they have missed the boat. Corrections will happen, they always do, but many are now claiming that there will no longer be any four digit Bitcoin available to buy.
Looking at the second largest crypto asset on the market shows that it is still massively undervalued, especially when compared to its bigger brother. Bitcoin is now less than 40 percent down from its peak whereas Ethereum is still over 75 percent away from its giddy height of $1,400 back in January last year.
Today ETH has managed to ride the coattails of BTC pulling in another 7 percent to reach $335. As noted by ‘CryptoFibonacci’ ETH could be approaching resistance again now.

#ETH Daily Chart.
Testing major resistance.#ETH pic.twitter.com/SQX93QDJ4V
— CryptoFibonacci (@CryptoFib) June 26, 2019

Ethereum gains in recent months have been sluggish in comparison. Granted, ETH is up 150 percent since the beginning of the year but it did get battered over 90 percent from ATH.
Crypto twitter commentator ‘Bleeding Crypto’ has also observed this:
“IF missed the BTC run. You HAVE A SECOND CHANCE with ETH. Look at the historical Screen shots and see for yourself that ETH has outperformed BTC in ROI year after year. Unless you want to listen to those ignorant ***** that say ETH is dead. R U going to blow it with ETH too?”

IF missed the BTC run. You HAVE A SECOND CHANCE with ETH. Look at the historical Screen shots and see for yourself that ETH has out performed BTC in ROI year after year. Unless you want to listen to those ignorant fucks that say ETH is dead. R U going to blow it with ETH too? pic.twitter.com/t3hYnvW9ee
— Bleeding Crypto (@Bleeding_Crypto) June 26, 2019

Last year Ethereum shot from current prices in mid-November to top $1,400 just two months later. That is a gain of 325 percent in just a few weeks. Of course, there is no ICO boom this time around and Ethereum has been lacking fundamental momentum with Serenity delays, but the ecosystem still has huge potential for even bigger gains.
What About Other Altcoins?
Ethereum is not the only undervalued altcoin. Those Bitcoin maximalists on CT will be partying right now but if a repeat of 2017 is on the cards, altseason could be just around the corner. Many are way down, over 80 percent from their peaks, so potential for gains will be greater when funds start shifting into altcoins.
Total market capitalization hit $365 billion today, but Bitcoin holds $225 billion of it alone. It is only a matter of time before the ratio adjusts and Ethereum is likely to lead the way when it does.
Image from Shutterstock
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Central Bank of Russia will Hold Bitcoin [BTC] Reserves Predicts Analyst

Reportedly, Russian lawmakers, the State Duma is expected to finalize a bill on Digital Financial Assets within two weeks. They have already held discussions on the bill once and seem to have received positive votes from the house. Deputy Finance Minister of Russia, Alexei Moiseyev said,
“Now we are looking at the text [of the bill on digital financial assets] and within two weeks, I hope, we will come out for adoption in the second reading,”
As reported earlier on Coingape, the Russia Federation had passed a bill on digital currencies which introduced as a series of norms for the citizens to follow.
Currently, they are working on implementing the complete set of laws around cryptocurrencies and ICOs. Russia might be one of the few nations to allow ICOs under its crowdfunding laws. Moiseyev also added,
“Within the framework of this concept, ICO regulation was approved. second reading, “
Also Read: Report Reveals How Russian Operators Used Bitcoin to Interfere 2016 US Presidential Election
The Regulatory Environment in Russia around cryptocurrencies and Bitcoin has been quite receptive compared to other nations. France also keeps a neutral attitude towards cryptocurrencies and ICOs. US, India, China and many other nations are against ICOs as they are either Ponzi schemes or based on wrong fundamentals of being a security or a cryptocurrency. However, Russia has planned to allow them unobstructedly.
A country which promotes a range of cryptocurrencies and blockchain projects can soon be expected to be inclined to hold Bitcoin [BTC]. Mati Greenspan, the Senior Market Analyst at eToro noted,
“The CBR [Central Bank of Russia] will be holding BTC reserves within 2 years. Mark my words.”
Currently, Russia holds 4554 billion US Dollars in Central Bank Reserve. If Greenspan’s prediction holds true and Russia assigns even 1% of its reserve value to Bitcoin [BTC], it’s market capitalization would increase by $45.5 billion.
Do you agree with Greenspan’s views given the current regulatory environment in Russia? Please share your views with us. 
The post Central Bank of Russia will Hold Bitcoin [BTC] Reserves Predicts Analyst appeared first on Coingape.
Source: CoinGape