Autonomous Next Report: Crypto Utopia (and Global Temperature Map at a Glance)

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Autonomous NEXT | mid-year 2018 Report

Global crypto temperature at a glance - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)

Overview

Over $20 billion has been raised by Crypto projects through Initial Coin Offerings since the start of 2017. That’s $18 billion more than a year ago, when we released our first primer on the space, Token Mania. So what has this Cambrian Explosion brought to financial services? In this analysis, Autonomous tracks the complex themes developing within the crypto economy, separating underlying technology progress and institutionalization from the bubbly noise.

Additionally, global law firm Latham & Watkins offers its views on current global regulatory approaches to crypto assets, as well as common tax considerations.

See: 

We are excited to share with you our latest keystone analysis, called “Crypto Utopia”, which seeks to explore the crypto landscape over the past year and deep-dive into the status quo for crypto funds, ICOs, and the regulation that governs them. We highlight the difficult path from ICO to a successful large-cap liquid coin, touching on how the financial industry is working to build tokens into an asset class, which would place the current nascent $300 billion of market cap as part of the $10 trillion in global Alternative investments, and eventually as part of the $500 trillion representing all securities and assets.

Key Takeaways

  • 2018 YTD has seen $12 billion in ICO funding, vs $7 billion for last year, but nearly half of that funding is EOS ($4.2 billion) and Telegram ($1.7 billion) hiding emerging weakness in the ICO system.
  • The path from ICO to a successful large-cap liquid coin is difficult, and is often exposed to scams and fraud which constitute as much as 20% of project white papers, phishing and hacking responsible for the theft of 15% of all crypto assets by market cap, and over 50% of ICO projects have failed to raise funds or are no longer operational.
  • Over 300 crypto funds have formed to invest in crypto assets, and control around AUM of $7.5-10 billion; however, assets are highly concentrated with a few entities, and the operating future for funds of less than $25 million is likely to be difficult
  • The financial industry is working to build tokens into an asset class, with developments across custody, institutional exchanges, decentralized exchanges, traditional financial products (e.g., Bitcoin futures) and Security Tokens
  • A variety of third parties – from legal to corporate advisory to exchanges – have formed in the ICO space to monetize solutions around these needs, driving the all-in price of an ICO process to $1-5 million, which is in turn passed on to investors through unreasonable valuations
  • We highlight emerging token taxonomies in the space, and propose a unified framework that incorporates public and private blockchains; and in conjunction with Latham & Watkins, we survey the regulatory and legal environment for crypto offerings across the world

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NCFA Jan 2018 resize - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with fintech, alternative finance, blockchain, cryptocurrency, crowdfunding and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: ncfacanada.org

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Holt Accelerator | Sam El Falah | Feb 27, 2020 The Holt Fintech accelerator is currently taking applications for its 2020 cohort and looking for the best and brightest companies to join. The Holt program is designed for Fintech startups who are pre-Series A (i.e. bootstrapped, pre-seed, seed, bridge) and pride themselves in offering startups as much visibility as possible! How can they help your startup? Capital: We can provide up to $130k in capital and meetings with potential investors Ecosystem: Plug into Holt Financial's digital bank and exchange for new revenue sources Potential Clients: Key people in financial institutions & a network of over 300 Fintech influencers worldwide See:  Holt Accelerator Joins NCFA as an Industry Partner Think you are ready to be part of the Holt adventure? Mark your Calendar! The application deadline is May 9th, 2020, 11:59 PM EST. http://bit.ly/35u0jsN For more information visit www.holtaccelerator.ai Social Media Profiles: https://www.linkedin.com/company/holt-accelerator https://www.facebook.com/HoltAccelerator https://twitter.com/HoltAccelerator #Holt2020 #JoinTheFamily #FintechAccelerator The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a ...
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holt apply - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)
BCSC | Release | Feb 27, 2020 Vancouver – The Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding. Proposed National Instrument 45-110 Start-up Crowdfunding Registration and Prospectus Exemptions would replace and enhance the requirements currently in effect in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick and Nova Scotia. Enhancements from the current requirements include: Increasing to $1 million (from $500,000) the maximum total amount that could be raised by a business under the crowdfunding prospectus exemption per year; Increasing to $2,500 (from $1,500) the maximum investment a purchaser can make in an offering, with a higher limit of $5,000 if the purchaser obtains advice from a registered dealer that the investment is suitable for the purchaser; Requiring funding portals to annually certify that they have sufficient working capital to continue operations for the following year. “Small businesses and start-ups need unified regulatory requirements for securities crowdfunding to expand their access to capital,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “This proposed National Instrument would introduce a single, harmonized set of rules, and increase the thresholds for capital-raising and investing, while still providing ...
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AS/COA | Luisa Horwitz | February 19, 2020 In a region where a large portion of the population is underbanked, fintech offers an innovative solution for Latin America, paving the way for wider financial development, competition, and inclusion in the region. In the case of Argentina, fintech startups are sprouting and spreading fast. Pierpaolo Barbieri, founder of the startup Ualá, talked with AS/COA Online’s Luisa Horwitz about what motivated him to make the financial system more accessible in Argentina, a country where more than half of people have never had access to a non-cash payment method. “What we try to do is democratize access to financial services,” says Barbieri, who in this episode also covers the generational divide when it comes to fintech, as well as what the sector looks like across Latin America. “We don’t want to change the system from within; what we want is a new system.”  Continue to the full article --> here See Fintech Friday Podcast Episodes The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners ...
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Fintech in argentina - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)
UK FCA | Feb 21, 2020 This analysis also contributes to the decisions we make affecting consumers, market integrity and competition. Drivers of change The first chapter describes the common themes across sectors with a focus on those themes that are having the greatest impact on the sectors we regulate. And in the light of EU withdrawal and its impact on financial services markets, we give an overview of our position in the current international context. The 7 sectors The remaining chapters cover all the markets we regulate: retail banking and payments retail lending general insurance and protection pensions savings and retirement income retail investments investment management wholesale financial markets Continue to the full article --> here Download the 86 page PDF Report - Sector Views (Key Areas of Harm Identified) The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, ...
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TransUnion Canada | Release | Feb 24, 2020 New TransUnion study considers common myths around the profile of FinTech borrowers in Canada FinTechs are not just attracting younger Canadians: 46% of FinTech borrowers are over the age of 40 Short-term loans are not the primary focus for FinTechs: 88% of FinTech loan terms are between 13-60 months FinTechs are not just catering to 'underbanked': 51% of FinTech consumers have 3 or more existing credit products TORONTO, Feb. 24, 2020 /CNW/ - A new study from TransUnion explores the evolving trends around the FinTech lender landscape in Canada. The research study analyzed over 21 million non-mortgage credit products originated in Canada from Q1 2017 to Q2 2018. The study's findings reveal key insights that appear to debunk commonly held beliefs around the profile of FinTech borrowers in Canada, as well as the ways that FinTech lenders are employing and embracing different credit strategies compared to some of the more traditional lenders. See:  Robocop vs. Terminator in Fintech; Comparing DeFi originations to Digital Lenders in the early years The study defined FinTech lenders as those who rely on advanced computer algorithms or other technology as their primary platform to enable, support or ...
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transunion fintech report on lending trends - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)
Forbes | Michael del Castillo | Feb 19, 2020 Credit card giant Visa has granted its principal membership to a cryptocurrency company for the first time. Officially awarded to cryptocurrency exchange Coinbase in December, but not revealed to the public until today, the membership cuts out a crucial, and expensive middleman from the process of issuing a debit card that lets users spend their own bitcoin, ether and XRP anywhere Visa is accepted. Perhaps even more importantly though, the principal membership makes Coinbase the first cryptocurrency company with the power to issue debit cards for others, including other cryptocurrency companies and more traditional firms alike. Visa confirmed it granted Coinbase the principal membership, clarifying that the company itself won’t actually accept cryptocurrency when the project goes live later this year. See:  Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators While Coinbase says it’s not planning on issuing cards to others anytime soon, the principal membership status marks a potentially important new revenue stream for the company, which Forbes estimates saw a 40% decline in earnings last year. By simplifying the process of spending cryptocurrency anywhere Visa is accepted, the membership also lays the foundation for ...
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Coinbase crypto visa payments - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)
Forbes | Ron Shevlin | Feb 21, 2020 LendingClub, one of the nation’s first peer-to-peer lenders (oops! I mean, “marketplace” lenders—real ”peer to peer” lending lasted all of about a month), announced it plans to acquire Radius Bank, a relatively small Boston-based bank, unknown to most people outside of the industry (and within, for that matter). The press release announcing the pending deal contained the usual platitudes from the acquiring CEO: “This is a transformational transaction that allows us to reimagine banking in a way that is free from legacy practices and systems. We will create a category-defining experience for our members that will dramatically enhance the resilience and earnings trajectory of our business.” Despite the buzzword-laden proclamation, this acquisition makes a lot of sense for both parties for reasons that go beyond what many observers have reported on. The Short-Term Benefits Aren’t About Radius Bank Much of the discussion about the deal has focused on the obvious and shorter-term benefits of the acquisition, including a more stable source of funding and a $40 million reduction in bank fees and funding costs, both of which will help boost the spread Lending Club earns on the loans it keeps on its ...
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Pymnts | February 18, 2020 Online bank N26‘s decision to exit the U.K. has customers feeling left behind, CNBC reported. The Berlin-based digital bank said it would not be able to operate in the country anymore in the wake of Brexit, as it will no longer have a license to do business there. The startup will shutter all of its U.K. locations on April 15. N26 made its entry into the U.K. in October of 2018 — more than two years after the U.K. made its decision to leave the European Union, but six months before Brexit was officially planned. However, the fact that N26 used Brexit in its reasoning to leave the U.K. hasn’t sat well with some. One customer in London told CNBC that he was “outraged” that the company had used Brexit as an excuse, calling it “fake news.” He said N26 needed “an excuse” for investors, and had found in Brexit a convenient scapegoat so that it wasn’t N26’s own failure. Others said they were disappointed in the closure, enjoying the extra bonuses that come with accounts. See:  Majority of London FinTechs not prepared for no-deal Brexit N26 is one among a new breed of branchless ...
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TechTalks | Andrey Sergeenkov | Feb 12, 2020 As 2018 drew to a close, crypto skeptics were ready to write obituaries after the devastating bear market that year. Talk of blockchain and cryptocurrency demise was rife among seasoned analysts. Just over twelve months later, the industry has shown remarkable resilience to rebound back. Regulators are a segment of stakeholders who seem to be appreciating that crypto is here to stay, with Federal agencies in the US and Chinese authorities praising the potential of this technology in their respective countries’ digital future. Blockchain technology has gained independent credibility over and above its application in cryptocurrency. The opportunities are endless as the emerging enterprise sector continues to draw plaudits. So far, this technology has grown in spite of regulatory infrastructure rather than because of it. A suitable regulatory climate is essential for widespread adoption. See:  The Decade in Blockchain — 2010 to 2020 in Review This is how Jason Lee, Vice President of NEM Foundation, describes the industry’s evolution: “2017 was the year of the blockchain craze. In 2018, we hit the brakes towards the end of the year. For 2019 and the start of 2020, Don Tapscott at the World Economic ...
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blockchains - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)
Betakit | Isabelle Kirkwood | Feb 10, 2020 PwC Canada and CB Insights have released the MoneyTree report on Canadian investment trends for the second half and full year of 2019 (all figures in USD). “Increased competition for funding from global investors has created a healthy funding environment for Canadian startups.” Last year saw Canadian venture capital (VC) funding rise to a record-setting $4.1 billion. Although Canadian funding experienced an 11 percent decline in deal count last year, the report tracked a 16 percent increase in year-over-year funding. Some massive rounds from last year were not included in this year’s report, including Verafin’s round, as the company did not disclose the debt and equity break out, and Sonder’s $210 million raise as the company is now headquartered in the United States. A strong year for AI, FinTech, cybersecurity Artificial intelligence companies saw increased investor attention in 2019, investment in Canadian AI companies more than doubled in the second half of 2019. Last year’s funding to Canadian AI companies saw a 49 percent year-over-year increase in 2019 to $658 million with deal count reaching a new record at 57 deals. See:  The paradox of 2020 VC is that the largest funds ...
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funding by region 2019 - Autonomous Next Report:  Crypto Utopia (and Global Temperature Map at a Glance)

 

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