Category Archives: Blockchain, Crypto, ICOs

The Wait for Grams: Why Telegram Might Just Cancel Its Public ICO

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Coindesk | Brady Dale | Apr 11, 2018

The average crypto enthusiast isn't likely to get their hands on grams - Telegram's crypto token - anytime soon.

While half of the ambitious $1.2 billion the messaging giant hoped to raise was supposed to come from an ICO open to public investors, recent SEC filings confirm Telegram has already raised $1.7 billion from two private sales. Now, sources with knowledge of the deal believe the company is likely to scrap its public sale altogether.

The reason? Raising money from the public could be way more trouble than it's worth.

For one, Telegram's blockchain, called the Telegram Open Network (TON), hasn't been built yet. (To be clear, no one has received any grams.) As such, Telegram is selling what basically amounts to IOUs for future grams under the Simple Agreement for Future Tokens (SAFT) framework.

That means - as displayed by the company's SEC filings - the company is selling a security, which cannot be sold to non-accredited investors (except under some exemptions).

"The regulatory environment is in a weird place with most teams having more questions than answers," said Anthony Pompliano, a general partner at Morgan Creek Capital Blockchain. "If teams can raise their capital goals in private sales, they'll continue to do so until there is less ambiguity in regulations."

This appears to be what Telegram is doing, although it's been tough to tell exactly what the founders are thinking since they've said nothing about the ICO or TON, both of which the white paper details will help facilitate a network of faster payments, file-sharing, decentralized privacy, domain registration and more.

Telegram did not respond to a request for comment.

Pompliano told CoinDesk:

"The goal of fundraising is to gain access to capital to allow a team to build a product and company. It appears Telegram has already achieved their goal so there would be no reason to conduct a public sale."

Tech first

This is especially cogent as it relates to the amount of work a legal public sale would entail.

For one, Telegram would have to go through a know-your-customer and anti-money laundering verification process to be able to sell to everyday investors.

For private, known investors that have been identified plenty of times for investment purposes, the verification work is less cumbersome, but for a store cashier who is investing for the first time, it's more challenging to prove they are who they say they are. And it just has to do it so many more times. This would be no small lift and may not be attractive to a company that already has plenty of money.

Plus, there's already a secondary market for grams whereby small investors are buying the crypto tokens from whales that got into the private sales, according to Alexander Borodich, an alum of the Mail.ru Group, one of Russia's largest tech companies, and an angel investor passed on the opportunity to invest in Telegram's ICO.

As such, he said it's unclear whether a legit public sale will happen.

The TON technical white paper describes an ongoing token sale that will continue intermittently well into the future. That phase may be a sort of public sale, but one that won't begin until the protocol launches.

See:  George Soros Prepares to Trade Cryptocurrencies

And according to Sid Kalla of the Turing Advisory Group, building the product before selling to the public would be that smart thing for Telegram to do.

He told CoinDesk:

"The private sales were raised at around the top of the market euphoria. For a public valuation to reach back to those levels, the crypto community would need to see something concrete."

Public opinion

Which is another reason Telegram may discard it's public sale for some time - so it doesn't have to deal with thousands of people's unsolicited opinions.

When a company decides to do a public sale, it introduces complexity into its public relations.

That's why large, publicly traded companies devote whole departments to investor relations, said Stephen Palley of the law firm Anderson Kill. And that's something young startups may not have bandwidth to manage, he said.

"In this twilight world of ICO crowdfunding, you have a company that's brand new, it's a startup ... You suddenly have thousands -- tens of thousands -- of people who feel like they are stakeholders," Palley continued, adding:

"Do you really want to manage all those people?"

While Telegram is five years old, it's still a relatively small company that's so far bootstrapped development of its messaging platform from the founders' own pockets, which suggests it doesn't have experience in investor relations.

See:  Introducing the Convergence Ecosystem

Kalla agreed, telling CoinDesk, "Since Telegram is trying to solve several hard technological problems (like sharding, say) there may be inevitable delays and setbacks. The private investors are likely more used to such things than the public at large."

As much as possible

That said, not everyone agrees that Telegram will scrap its public sale so soon.

"I see no motivation for Telegram to call off their public sale," Joe DiPasquale, CEO of the crypto fund-of-funds BitBull Capital, wrote CoinDesk via a spokesperson.

"They seem dead set on raising as much capital as possible ... Considering they're targeting the mass adoption of their user base, I can't imagine them estranging the masses by canceling the public sale."

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Introducing the Convergence Ecosystem

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Outlier Ventures |  Lawrence Lundy-Bryan | March 2018

Today we are introducing the Outlier Ventures vision of the future and our refined thesis: The Convergence Ecosystem.

The Ecosystem sees data captured by the Internet of Things, managed by blockchains, automated by artificial intelligence, and all incentivised using crypto-tokens. The Convergence Ecosystem is open-source, distributed, decentralised, automated and tokenised and we believe it is nothing less than an economic paradigm shift.

How We Got Here: The Outlier Journey

From Blockchain-enabled Convergence

In late 2016, we published a paper titled: ‘Blockchain-enabled Convergence’ outlining our investment strategy. The paper was the result of over three years’ experience researching, investing and building blockchain-based businesses. Our insight was that blockchains are not just a secure ledger for cryptocurrencies and other digital assets, but that they represented something more transformative: a decentralised data infrastructure. Infrastructure that could solve technical and market problems across a variety of emerging technologies like artificial intelligence, autonomous robotics, the Internet of Things, 3D printing and augmented and virtual reality.

In 2017, crypto-tokens proved they are the first digitally-native mass coordination mechanism

2017 saw a vast change in the cryptocurrency and blockchain markets to arguably the peak of inflated expectations as per the Gartner Hype Cycle. The ERC20 smart contract industrialised the token sale crowdfunding model, raising over 4 billion dollars in funding. Despite misplaced energy and too much focus on token prices, it is now clear, in a way that wasn’t in late 2016, that crypto-tokens are a critical missing component in decentralised networks – the first digitally-native mass coordination mechanism for humans, bots and machines. Recognising the underlying importance of crypto-tokens to create an ecosystem of converging technologies, we started investing.

From IOTA, Botanic & SEED, Evernym & Sovrin, to Fetch and Ocean

Over the last year we have partnered with and invested in IOTA, a foundation building Internet of Things infrastructure with a new type of decentralised data structure. Botanic and the SEED Vault foundation it founded, creating a platform for developers to publish trusted software bots. Evernym, a company using the Sovrin Network and Protocol to establish self-sovereign identity. Fetch, a startup building an emergent intelligence protocol combining distributed ledgers with machine learning.  And most recently, Ocean Protocol, who are developing a decentralised data exchange protocol to unlock data for AI. Each of these investments have been strategically chosen because they are a complimentary piece of decentralised infrastructure required to create the Convergence Ecosystem.

See:  The Age of Artificial Intelligence in Fintech

Why We Need The Convergence Ecosystem

Centralised Web 2.0 has failed…

Centralised Web 2.0 digital infrastructure has failed. Too many hacks and data leaks. No individual privacy. Monopoly control over global information and communities networks. The Internet of Things is creating an unmanageable data environment, and artificial intelligence is giving those who control the most data more power than any company in history.  As Tim-Berners Lee, the creator of the Web, recently wrote;

“What’s more, the fact that power is concentrated among so few companies has made it possible to weaponise the web at scale. In recent years, we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data.

Something must change.

 

We are 10 years into the decentralisation revolution

It has been ten years since the publication of Satoshi’s seminal paper and the introduction of the first viable decentralised solution to the problem of double-spend in digital networks. Bitcoin sparked interest and innovation in other cryptographic and decentralised technologies including blockchains and crypto-tokens. We are in a rapid period of experimentation around decentralised technologies including consensus mechanisms, identity, data structures, crypto-economic designs and smart contracts. Taken together, we see the foundations of a new data infrastructure.

See:  WEF’s Sheila Warren: blockchain is the door to new digital reality

Our Vision: The Convergence Ecosystem

Introducing the Convergence Ecosystem

We believe that future decentralised data infrastructure will come from the convergence of the Internet of Things (data production), blockchains (data distribution), and artificial intelligence (data consumption). The integration of these technologies will see markets become increasingly open-source, distributed, decentralised, automated, and tokenised.

 

 

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Popular trading platform Bunz launches its own cryptocurrency

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The Globe and Mail | Peter Nowak | April 9, 2018

Bunz Inc., a fast-growing Toronto-based online-bartering market, is getting into the hot cryptocurrency game.

The company is touting BTZ, which is pronounced “bits” and is short for Bunz Trading Zone, as the first Canadian cryptocurrency to launch to an already-established community – its own members. BTZ will become available to the company’s 200,000 users on Apr. 9.

Members will each get 1,000 BTZ that they will then be able to exchange with one another, or for goods and services at more than 100 merchant partners. At the launch, the 1,000 BTZ will be worth approximately three to four cups of coffee, but cryptocurrencies can fluctuate in value.

See:  TokenFunder Initial Token Offering and Interview with CEO Alan Wunsche – Getting Down to Brass Tacks

“You can use it in a simple and elegant way,” says Bunz chief executive Sascha Mojtahedi of the company’s foray into cryptocurrencies. “We know the technology works … but we haven’t really seen a viable use case that the mass market can get behind. I think we’re going to be the first example of that.”

Cryptocurrencies such as BTZ and the better-known Bitcoin and Ethereum are encrypted digital assets governed by a technology known as a blockchain. Their decentralized nature means they’re largely free of regulations, so far, which can result in quicker transactions between users that are exempt from third-party fees such as bank or credit card charges.

Bunz was started in 2013 as a private Facebook group by fashion-design graduate Emily Bitze. She was struggling financially at the time and created the group as a place to swap unused items with friends.

One friend could offer up a lamp they no longer needed, for example, in exchange for someone else’s unwanted bicycle. Cash didn’t necessarily enter the equation.

The group grew quickly through word of mouth to thousands of members, expanding to other cities and beyond Facebook. The Bunz app and website launched in 2016 and have both continued to grow.

Mr. Mojtahedi, who was previously an analyst and manager at Toronto-Dominion Bank, came on board in 2014. He says Bunz users have completed more than a million transactions, with 2.3 million items currently on offer in more than 200 cities around the world. Bunz currently has 26 full-time employees.

The growth has also attracted institutional backing, including from Fidelity Investments, which hasn’t disclosed the amount of its investment. The holding is among 75 companies in the Fidelity Global Innovators Class mutual fund, which has attracted more than a billion dollars of investor money since its launch in late 2017.

See:  The Cryptocurrency Industry Might Actually Benefit From an Ad Ban

“I like the marketplace they are building. It’s unique and that makes it valuable,” Mark Schmehl, portfolio manager at Fidelity Investments, said in an e-mail. “I also like the cryptocurrency they want to launch. I think it could transform the app from a curiosity to something more durable and mainstream.”

The simplicity of Bunz’s barter system and the absence of cash – even though users can post approximate monetary values for trade items – have been key to the company’s growth so far, but it’s also the firm’s biggest challenge. With no money changing hands, Bunz lacks an obvious income stream.

Mr. Mojtahedi says the company has a revenue model designed, but won’t comment on what it might be or when it will be introduced.

The addition of BTZ, he adds, is more of an enticement to get people using Bunz than an attempt to introduce a form of monetization. The company won’t be taking a cut of BTZ transactions.

“You have to be able to reward people with cryptocurrency that they’ve earned as a result of their passive involvement in the network and then enable them to use it with their peers and merchants,” he says. “It gives us the room to create new models that people may not have thought of.”

BTZ is launching in conjunction with a host of merchants in Toronto at first, with partners including the Drake General Store, The Fifth Pubhouse and Tiny Record Shop. Several businesses see their partnerships as a way of spreading brand awareness among Bunz users, as well as a way to test the waters of cryptocurrencies.

Continue to the full article --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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Your guide to cryptocurrency regulations around the world and where they are headed

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CNBC | | Mar 27, 2018

As demand for cryptocurrency grows, global regulators are divided on how to keep up. Most digital currencies are not backed by any central government, meaning each country has different standards.

Every seemingly small regulation announcement has driven the price of bitcoin and other cryptocurrencies in 2018.

Here's your guide to where digital currencies stand with governments and regulators around the globe.


Global regulators

View on bitcoin: Legal tender, depending on the country.

Policy on exchanges: No global regulator exists at the moment.

At a G-20 meeting this month, Argentina's central bank governor outlined a summer deadline for members to have "specific recommendations on what to do" and said task forces are working to submit proposals by July. Italy's central bank leader told reporters after the meeting in Buenos Aires, Argentina, that cryptocurrencies pose risks but should not be banned, according to Reuters.

The Financial Stability Board, a global watchdog that runs financial regulation for G-20 economies, took a cautious tone in responding to calls from some countries to crack down on digital currencies.

"The FSB's initial assessment is that crypto-assets do not pose risks to global financial stability at this time," board Chairman Mark Carney said in a letter on March 18.

Carney, who is also governor of the Bank of England, pointed to the small size relative of the asset class compared with the entire financial syste. "Even at their recent peak, their combined global market value was less than 1 percent of global GDP," he said.

The International Monetary Fund has also called for more cooperation.

IMF Managing Director Christine Lagarde highlighted cryptocurrency's potential as a vehicle for money laundering and the financing of terrorism. In a March blog post, Lagarde called for policies that protect consumers in the same way as the traditional financial sector.

Japan

View on bitcoin: Legal tender as of last April.

Policy on exchanges: Exchanges are legal if they are registered with the Japanese Financial Services Agency.

Japan is the biggest market for bitcoin. Almost half of the digital currency's daily volume is traded in the country's currency, according to data from Cryptocompare.

Last week, the agency issued a warning to Hong Kong-based Binance for operating in the country without a license.

Hacks have been an issue in Japan and elsewhere. It was the first country to adopt a national system to regulate cryptocurrency trading after its exchanges were subject to some well-known breaches including Mt.Gox.

In March, Japanese regulators issued punishment notices to multiple exchanges and forced some to stop business altogether after the $530 million theft of digital currency from exchange Coincheck.

See:  How Asia Is Adopting Crowdfunding From The West


United States

View on bitcoin: Not legal tender, according to Financial Crimes Enforcement Network.

FinCen, a bureau of the Treasury Department, said in 2013 that "virtual currency does not have legal tender status in any jurisdiction."

Policy on exchanges: Legal, depending on the state.

The U.S. handles the second largest volume of bitcoin, roughly 26 percent, according to Cryptocompare.

U.S. regulators differ in their definitions of bitcoin and other cryptocurrencies.

The Securities and Exchange Commission has indicated it views digital currency as a security. Earlier in March, the agency expanded its scrutiny and said it is looking to apply securities laws to everything from cryptocurrency exchanges to digital asset storage companies known as wallets. The agency has focused on initial coin offerings, or digital coins released through fundraisers known as token sales, and has stepped up efforts to police them through recent subpoenas.

The Commodity Futures Trading Commission says bitcoin is a commodity. CFTC Comissioner J. Christopher Giancarlo, pictured above, has gained a reputation as a more cryptofriendly regulator. In written testimony before the Senate Banking Committee in February, he advocated a "do-no-harm" approach to ledger technologies. He also briefly changed his Twitter bio to list "#CryptoDad" among the accolades.

The IRS says cryptocurrency is not actually a currency. It defined it in 2014 as property and issued guidance on how it should be taxed.

Treasury Secretary Steven Mnuchin has been vocal about bitcoin's ability to aid criminals, telling CNBC in Davos in January his main focus on cryptocurrencies is "to make sure that they're not used for illicit activities."

 

See:  Crypto Industry Should Self Regulate, Says CFTC Commissioner


European Union

View on bitcoin: No EU member state can introduce its own currency, according to European Central Bank President Mario Draghi.

Policy on exchanges: Legal, depending on the country.

About 4 percent of cryptocurrency's daily volume is done in euros, according to Cryptocompare.

EU leaders have voiced concern about money laundering. European Commission Vice President Valdis Dombrovskis, pictured above, said at a February roundtable in Brussels that digital assets "present risks relating to money laundering and the financing of illicit activities."

The virtual exchanges and wallet providers should be under the "Anti-Money Laundering Directive," Dombrovski said. "The commission will continue to monitor these markets together with other stakeholders, at EU and international level, including in the G-20."

Draghi rejected Estonia's attempt to create a state-backed cryptocurrency called "estcoin."

"No member state can introduce its own currency," Draghi said in September. "The currency of the euro zone is the euro."

Regulations differ within the bloc.

France's financial regulator Autorite des Marches Financiers released a list of 15 exchanges it would blacklist in March. The country said it will make a joint proposal with Germany to regulate the bitcoin cryptocurrency market, Reuters reported.


United Kingdom

View on bitcoin: Not legal tender. "Only sterling is legal tender in the UK," according to Carney (pictured above).

Policy on exchanges: Legal, and need to register with the Financial Conduct Authority. They are required to meet the same anti-money-laundering counter-terrorism standards as other financial institutions, according to the BOE.

The exponential price gains in cryptocurrencies are "speculative mania," Carney said in early March.

"The time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system," Carney said in a speech. "Being part of the financial system brings enormous privileges, but with them great responsibilities."

Carney said the digital currency "has pretty much failed thus far on" traditional aspects of money.

"It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange," Carney said.

Many virtual currencies are trying to dislodge the British pound but "only sterling is legal tender in the UK," Carney said in another March speech.

The Financial Conduct Authority called crypto assets "high-risk, speculative products," in a warning to consumers in November.

South Korea

View on bitcoin: Not legal tender.

Policy on exchanges: Legal but use of anonymous bank accounts for virtual coin trading is prohibited. Need to register with South Korea's Financial Services Commission.

Trading in South Korea makes up about 4 percent of daily volume of bitcoin. For other cryptocurrency such as XRP, trading in the Korean won commands a premium to U.S. dollars. Asia's fourth largest economy has become a hub for trading but regulators have given mixed signals.

Financial authorities said in 2013 that bitcoin and other digital currencies are not legitimate currencies, according to the Korea Herald.

South Korea's justice minister said in January that the government was considering a shutdown of cryptocurrency exchanges. A petition asking the government to hold back on "unreasonable" regulation got 280,000 signatures following the announcement. The government responded by saying it will take firm action against illegal and unfair acts in cryptocurrency trading.

Last year, the Financial Services Commission banned local finance firms from trading bitcoin futures, according to local publication Business Korea. The commission also banned the use of anonymous bank accounts for virtual coin trading in January but said it doesn't intend to completely shut down domestic exchanges.

The government has said that while it will not ban bitcoin exchanges, initial coin offerings and futures will remain under scrutiny.

In late February, a government official said South Korea had still not decided how to regulate.

"The government hasn't made any conclusion yet. Sufficient consultations should come first," Hong Nam-ki, minister of office for government policy coordination, told parliament.


China

View on bitcoin: Not legal tender.

Policy on exchanges: Illegal.

Trading bitcoin in China is technically illegal.

In 2017, the government bannedICOs — a way for start-ups to raise funds by selling off new digital currencies — and shut down domestic cryptocurrency exchanges.

In January, a senior Chinese central banker said authorities should ban trading of virtual currencies as well as individuals and businesses that provide related services.

But activity in crypto has carried on through alternative channels like mining. Chinese authorities are looking to end the practice, according to Reuters, which cited an internal memo from a government meeting in January.

Singapore 

View on bitcoin: Not legal tender.

Policy on exchanges: Legal, may fall under regulatory purview of the Monetary Authority of Singapore.

The Singapore dollar makes up 0.02 percent of daily global bitcoin trading volume but the country has emerged as a hub for ICOs. Two of the 15 largest coin offerings happened in Singapore, according to a PwC report.

Singapore is positioning itself as more friendly to cryptocurrencies than other regions. There is no strong case to ban digital currency in the city-state, Singapore's central bank said in February, noting "it is too early to say if they will succeed."

In January, the Monetary Authority of Singapore urged the public "to act with extreme caution and understand the significant risks they take on if they choose to invest in cryptocurrencies."

The agency also said cryptocurrencies are not legal tender and highlighted the risk posed by bitcoin's anonymity.

Continue to the full article --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

 

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The Cryptocurrency Industry Might Actually Benefit From an Ad Ban

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Wired | Louise Matsakis | Apr 4, 2018

Cryptocurrency startup founders who want to advertise their new companies can no longer rely on the internet’s largest platforms to help spread their message. In January, Facebook announced it was banning ads that are "frequently associated with misleading or deceptive practices" including initial coin offerings and cryptocurrencies. Other platforms quickly followed suit; now, nearly all of the web’s most trafficked sites forbid cryptocurrency advertising. But entrepreneurs and researchers committed to the future of blockchain tech largely say they’re getting along just fine—and that the ban might even be a good thing.

In March, Google also announced a cryptocurrency crackdown that will go into effect in June across all of its platforms. Snap, Twitter, and MailChimp soon followed. And Reddit has been banning cryptocurrency ads since 2016. At this point, if you’re interested in advertising a cryptocurrency startup, your best bet might be word of mouth.

Advertising platforms like Google and Facebook have good reason to want to ban ads for cryptocurrencies and initial coin offerings, opportunities for investors to buy the tokens that power a blockchain application at a lower, early-bird price. ICOs and other cryptocurrency investment schemes are largely unregulated, and have repeatedly attracted scammers interested in ripping off unsuspecting investors. While many blockchain startups are legitimately trying to build a business using the new technology, some simply want to make a buck off the hype that comes with it.

The Securities and Exchange Commission has also indicated that many token sales are likely securities and need to be registered with the agency. By blanket banning them, advertising platforms shield themselves from the risk of promoting potentially illegal investment opportunities. On Monday for example, the SEC filed a complaint against the founders of Centra Tech Inc., a celebrity-endorsed blockchain startup, for orchestrating a fraudulent ICO. Criminal authorities separately charged and arrested the two men behind the company.

"I do think that, simply, platforms like Facebook and Google ultimately want to be seen as good corporate citizens," says Jerry Brito, the executive director of Coin Center, a non-profit research center that focuses on policy issues surrounding cryptocurrencies. "When there is an issue of investor protection that regulators in Congress have been vocal about, they are going to feel like they want to address that."

Shut Out

But the blanket ban across the internet’s largest advertising platforms largely doesn’t differentiate between promising startups and outright frauds. Even well-intentioned ICOs can’t use Facebook or Google—which together control over half of the online US advertising market—to get the word out.

That can feel particularly punitive when you consider that Google itself is reportedly exploring blockchain technology, and plenty of reputable companies and organizations like the United Nations and IBM are investing in it too. Facebook has also reportedly permitted other scam-ridden industries, like the diet pill business, to utilize its advertising platform unhindered.

Paolo Tasca, an Italian economist and the executive director of University College London's Centre for Blockchain Technology, says:

These platforms aren't very willing to give a voice to decentralized blockchain companies. "If the tech giants that are in control of the majority of our data in a centralized fashion are really willing to take this direction—which is against this kind of decentralized model—it's a really a bad method," he says.

Tasca says that there are scams in every industry, and that there likely isn't a disproportionate number in the cryptocurrency space. He also argues that unlike other businesses, cryptocurrency startups usually release a detailed white paper explaining their practices, and are subject to consistent feedback and scrutiny from investors. Tasca also says that ICOs are becoming more mature, and are beginning to include new safety tools, like a tracker that can detect whether an investor's cryptocurrency wallet address is potentially associated with illegally funneled funds. In other words, the advertising ban feels like it arrived after the worst of the ICO scams have potentially already passed.

"I do think these bans have been in reaction to the ICO boom, and the ICO boom has been driven by a lot of scams and outright frauds that basically use these platforms to market token sales that quite frankly are probably not really meant to be raising funds for a real product," says Brito. "Ultimately though I think this ICO boom fizzles, the way it seems to be doing, simply because there’s irrational exuberance there."

Check out:  Central banks should consider using digital currencies: China think tank

The other concern: that a blanket ban from leading tech companies can still send the wrong message about cryptocurrencies to the general public. "The average person will read into your blanket ban an implication that you have a judgment about crypto technology broadly which you don’t, you’re just trying to address bad actors," says Brito.

Who Needs 'Em?

While the advertising ban can feel unfair, some blockchain startup founders welcome it, arguing that it largely serves to weed out bad actors in the space, rather than punish legitimate startups. “The only people who are going to be worried are the people who don’t have good intentions,” says Arran Stewart, the co-owner of Job.com, a recruiting platform that utilizes blockchain technology. “If you allow these bad apples to remain, you lose consumer confidence from the masses.”

Stewart says he relies on private networks and word of mouth to promote his Singapore-based business. “These are very sophisticated platforms, they completely understand the crypto market, they are genuinely looking out for the best interests of their users. I greatly admire them for that,” says Stewart of companies that have banned cryptocurrency advertising. Catheryne Nicholson, the CEO of BlockCypher, a company that provides infrastructure for blockchain applications, largely agrees.

"I think the ad banning is a good thing at the moment," says Nicholson. "There are too many scams happening, especially with ICOs. The scams can be hard to detect. You have to dig in, know what to look for, and ask lots of questions. Even then, you can still be duped. Spoofing a website or payment address is very common and easy to do."

Continue to the full article --> here


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

 

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George Soros Prepares to Trade Cryptocurrencies

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Bloomberg Technology | Alastair Marsh, Saijel Kishan, and Katherine Burton | April 6, 2018

George Soros called cryptocurrencies a bubble in January. Now his $26 billion family office is planning to trade digital assets.

Adam Fisher, who oversees macro investing at New York-based Soros Fund Management, got internal approval to trade virtual coins in the last few months, though he has yet to make a wager, according to people familiar with the matter. A spokesman declined to comment.

Soros, speaking at the World Economic Forum in Davos, said digital coins cannot function as actual currencies because of their volatility. But he didn’t predict the hard tumble that some observers had forecast at the time.

“As long as you have dictatorships on the rise you will have a different ending, because the rulers in those countries will turn to Bitcoin to build a nest egg abroad,” Soros, 87, said on Jan. 25.

Since the billionaire investor made his comments, Bitcoin has fallen 41 percent. The asset’s whipsaw ride over the past six months has caused some investors to doubt the value of trading it. Former hedge fund manager Mike Novogratz shelved plans to launch a crypto fund in December, shifting his efforts to a merchant bank focused on cryptocurrencies and ventures based on related technologies.

See:  Paycase Financial: Cryptocurrency Brokerage Expects a Large Amount of Volume When the Desk is Launched

Other macro managers have turned to digital coins as profits from their hedge funds dwindle. John Burbank, who shuttered his main fund last year, plans to raise $150 million for two funds investing in digital currencies. His Passport Capital started the funds in January and have mostly sought investments from family offices and other wealthy investors.

Billionaire Alan Howard made sizable personal wagers -- separate from his firm -- in cryptocurrencies last year and plans to put more of his own money into digital assets and the blockchain technology behind them.

Continue to the full article --> here

 


The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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TokenFunder ITO Opportunity until April 30 and Interview with CEO Alan Wunsche – Getting Down to Brass Tacks

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NCFA Canada | April 5, 2017

With NCFA Blockchain Advisor and Founder/CEO of TokenFunder, Alan Wunsche, having an active Initial Token Offering (ITO) in the market until it closes April 30, 2018 (available to all types of investors including retail), we thought it would be a great opportunity to interview Alan to shed some light on the TokenFunder vision, ITO itself, and roadmap ahead.

What drives you forward personally with TokenFunder?

Alan:  What drives me forward are possibilities for economic innovation and a transformation of finance with new technologies. We’re seeing the decentralization and democratization of finance through open source monetary systems on blockchains.  This is real fintech innovation happening right now.  Programmable blockchains combining a smart contract (called a “token”) with multiple features such as the ability to easily send cryptocurrency – that is our future now.  With cryptocurrency, investors around the world can be direct investors in a startup. At TokenFunder, we want to make this funding option possible for all companies.

 

You’re a blockchain expert but also a CPA.  Can you provide a regulatory perspective on the innovation of digital coins and token offerings?

Alan:  As a CPA, I’m a professional who cares about investors and getting transparency and disclosure for investors. Permissionless and direct investing sounds incredible but most investors know that investing in general is a regulated space and investing in public companies differs from investing in private companies, especially with early stage projects.

In 2017, while TokenFunder was working with the Ontario Securities Commission LaunchPad, we experienced an explosion of Initial Coin Offerings (“ICOs”) around the world. Over $6B was raised by ICOs with blockchain tokens and these projects proved the power of the technology to enable permissionless investing.

Many of these ICOs became black holes that offloaded most of the risk onto their investors.  One big problem with many ICOs is that purchasers (contributors) received coins/tokens but no rights in the company. Many ICO projects encourage a pump and dump mentality full of speculation with large pre-ICO discounts and it’s difficult to know who’s involved and the real value of the project.  Ultimately a lot of hype…and in many cases investors aren’t getting a level playing field. You can imagine how that’s a big issue for regulators. We also think investors will demand more.

"TokenFunder foresaw these issues and so we chose to offer regulated security token offering from the start."

 

What is TokenFunder’s vision?

Alan: TokenFunder’s vision is to transform venture financing by empowering investors to invest directly in the most innovative startups through the power of a regulatory-compliant blockchain-powered funding and growth platform.  Thousands of startups are building large networks of financial and advisory supporters quickly, efficiently, and securely through blockchain technology.  Through cryptocurrencies, blockchain technology is unleashing a global and borderless capital network, and TokenFunder will empower businesses to directly leverage a global capital network that can accelerate success.

A core component of TokenFunder’s vision is being a regulatory-compliant leader in the sector. We’ve worked closely with securities regulators and will continue to seek regulatory approvals that supports a healthy innovation investing ecosystem in this new and exciting blockchain-power era of digital finance. Our roadmap, subject to regulatory approvals, includes liquidity on a trading platform of tokens we issue as well as other tokens.

 

What is TokenFunder building?

Alan:  TokenFunder is building a platform that will reinvent venture capital with a trusted, regulated end-to-end blockchain token launch and governance service to help innovators fund and grow their businesses. We call the core platform STAMP - a Smart Token Asset Management Platform.  We’re designing the platform with best practice governance features from traditional venture capital such as milestone-based tranche payments. We’ll also be encouraging advisors to engage with the companies through the platform in an advisory token economic model.

What is TokenFunder doing differently?

Alan:  At TokenFunder we came to the market with a new proposition -- to build a platform that would bring the global cryptocurrency pool to companies in a way that included governance features.

The first step was to have Know Your Customer (“KYC”) verification checks in our processes and also to check for investor suitability.  Think back to all the 2017 ICOs that took in funding anonymously, who didn’t know where the funds came from and whether their project was a suitable investment for the backer. Without this information, they literally can’t care about their investors even if they wanted to.  This is naturally a problem for securities and investment regulators whose mandate is investor protections.

Before you can invest in TokenFunder’s Initial Token Offering, we have KYC verification and suitability checks. We’re building KYC whitelisting into the FNDR token that we’re going to distribute to our token holders so you’re not going to be able to invest anonymously.

 

TokenFunder has an active ITO where any investor can participate in future revenue sharing from TokenFunder profits.  Can you tell us about the opportunity?

Alan:  Important to note that you can invest in TokenFunder’s ITO until the opportunity closes at the end of this month on April 30, 2018.  Our token holders will share in 80% of the future distributions based on the business profits.  Once the ITO closes, all investors that participated in the ITO will receive their FNDR tokens and we’ll be swiftly moving forward with the business roadmap to seek the required regulatory approvals to have the platform registered as a regulatory-compliant token issuance and trading platform.

 

What does it mean to be a token holder?  Do token holders get equity or special participation rights?

Alan:  Token holders are essentially a special class of share with rights to the future distributions made from platform profits. While token holders don’t vote on Board representation, we do in the future plan to give token holders a voting mechanism on the companies that are accepted to the platform.

FNDR token holders will receive a proportionate profit share based on the revenues generated from TokenFunder service fees paid by businesses who use the funding platform and network.  TokenFunder will also receive a portion of the tokens issued by business customers. As this is a security and this is a forward-looking statement, I need to add that the fee model may of course change for competitive and other reasons.

Finally, we expect FNDR tokens to be liquid -- with the appropriate regulatory approvals and restrictions -- and be tradeable on our own exchange or listed on third-party regulated exchanges.

How retail and accredited investors become FNDR token holders:

 

 

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada.  For more information, please visit:  www.ncfacanada.org

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