FINTECH FRIDAY$ (EP.7-Aug 31): How to Structure an ICO and the Mind of a Fintech-preneur with Gary Schwartz of Pegasus Fintech Inc.

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NCFA Canada | Aug 31, 2018

FINTECH FRIDAY$ (EP7-Aug 31):  How to Structure an ICO and the Mind of a Fintech-preneur

About this episode: This week our host Manseeb Khan sits down with Gary Schwartz the Managing Director of Pegasus Fintech Inc.. They covered how to structure an ICO, to surgary donuts , and impacting investing. Enjoy!

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: Gary Schwartz, Managing Director, Pegasus Fintech Inc.

Over the past 20 years, Gary has played a leadership role in the high-tech industry founding, investing and managing a number of companies in the health, marketing, social media, automotive and financial sectors.  He is a six-time recipient of the Deloitte Fast 50 Award and was recognized as the "2013 Mobile Commerce Evangelist of the Year" and "2014 US Retail Innovator of the Year."  Gary is a Simon & Schuster NYC author with titles that include "THE IMPULSE ECONOMY," "FAST SHOPPER, SLOW STORE" and is presently writing a book on the AI called "IF THINGS COULD SPEAK."  He is president of the Canadian Lenders Association and Managing Director of Pegasus Fintech. Gary is alumnus of Columbia University in New York and the Stanford University Center in Yokohama, where he was the recipient of the Asia and Japan Foundation Fellowships.

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Transcription of Interview

Manseeb Khan: Hey everybody Manseeb Khan here and you are tuning into the Fintech FRIDAY podcast today I have an incredible guest. You may have heard of them before I got from Pegasus fintech. If you haven't seen any news blog post on Medium or if you haven't seen any of his stuff on LinkedIn, you are truly missing out It's an absolute goldmine of information.  Gary thank you so much for making it here.

Gary Schwartz: Thanks for having me I appreciate you inviting me on.

Manseeb Khan: No absolutely. So, I guess for the audience could you just give a minute of who you are, and a little bit of what Pegasus is?

Gary Schwartz: Sure. So, I'm you know I'm a fin-tech guy. I've been in space for 25 years as an entrepreneur. Right. So, I've started a number of companies in the space everything from obviously fin-tech through to health-tech, Mar-tech, ad-tech, social-tech etc. You know starting them as baby upstarts in the garage and taking them through to exit.  So that's what I do. And its sort of a natural progression that the block chain space is hugely attractive for an entrepreneur because it facilitates the growth of the business in a very aggressive fashion. And a Pegasus was conceived of about a year back with a bunch of folks with different skill sets that go together to accelerate incredible use cases on a block chain. And we will bring different skill sets the table our CEO headed up blockchain for Accenture in the valley. She did all the due diligence on Ripple, she comes with a wealth of information and insights into you know framework and governance and other team members you know focus on structure and compliance. And you know I'm the soapbox guy works on strategy and positioning and we've got amazing team and we work with companies all around the world in accelerating the use case and driving their capital formation goals.

Manseeb Khan: That's incredible. Could you. So, speaking of Ripple could you I guess deep dive a little bit and talk about the difference between a crypto investor compared to the regular traditional street investor?

Gary Schwartz: I think that's what really, we're all grappling with right now is you know the crypto community is evangelist community they're very different from what we would treat up as the incumbent investor. They serve the anti-investor right. So, you look at them as sort of a little bit libertarian you know wild west posse guys that at least out of the gates in the 90s that that was birthing ground up of you know what we now know as a block chain. It was very much of zip drive and shotgun under the pillow. You know very anti-establishment which is fantastic right, because that's the root of what we know as a block chain and that the first currencies that came out like Bitcoin,

Gary Schwartz: right? But when you're an incumbent investor you look at and it is incredibly scary right. There’s not the structure that you expect of as a traditional mainstream investor. At Pegasus look at this. You know we talk about you know we have this analogy where we talk about there's a mountain right in it and it's sitting right smack in the middle of this marketplace. On one side of the marketplace you get these crypto bugs on the other side the marketplace you get your incumbent investors in street and they really can't see each other and they just they look across and on one side they think of you know incumbent investors look across and go. Oh, it's a wild west I don't want to touch it. And then the crypto investors look across the street and think of them you know think of the street as dinosaurs. Right our job is to tunnel a hole between these two sides. Really when you think about it the crypto community know that they need more structure. They know that they need things that the Street has nailed the street wants to you know take advantage of this new marketplace with this fluidity the opportunities that are obviously in this new more fluid marketplace.

Gary Schwartz: So, the whole goal is to really get the vernacular consistent across both sides and get the things in place. So that you know what the crypto community self-policed now becomes more what the street sees as compliance and so that whole structure and nomenclature around compliance you know for the street to know that there is they are investing in something that's the security that they're holding provisions. that that people aren't taking their, you know cash out early and leaving the other investors you know holding the bag. The early days of folk taking their money and buying Lambo's I think is gone. The two sides are meeting. What I find so interesting about community is libertarian the crypto community is very much what I refer to as a ME and WE marketplace. So, they like the street they care about making profit. They care about you know doing well with their investments. And so that's the ME. You know what's in it for me. But isn't there it much. I think a huge group of individuals that care about the we. What does this mean to the global economy? What does this mean to the future of the marketplaces?

What does this mean to the environment? What is this an impact investment, or do you think of this as my analogy is sort of like you know it's a sugary doughnut right. So, you have sugar on one side you know the me, you want the sugar on the other side. But there's a big hole in middle and the hole in the middle is great because these guys don't want the middle. They don't want government banks, multinationals. they want that minimize. Now that that story is great and if it's optimized it creates huge opportunities for incumbent investors to come in and appeal to me. create a me scenarios that they know how to do. You know how to take advantage? How to drive liquidity and a website? What are the models for the new economy? models that will really not just make the middle fatter but actually get to the end constituents the people that really need their cash to drive their businesses, to drive their services. So, it's huge. Advantages to this new economy and we just have to make sure that the incumbents street you know sees how they can play safely.

Manseeb Khan: I absolutely agree with you. I think it should be interesting to see how regulation and institutions come in and build that bridge between crypto investors and Street investors.

Gary Schwartz: the boat slipped the harbor it's not just S.E.C. throwing out subpoenas. it's guys proactively understanding that they need to work within the structures that are out there. so, you know security is a security is a security. Yes, a utility token is not a security, but it still needs to be on a compliant exchange. It needs to drive liquidity and therefore needs to be on the exchange which can manage that to the highest possible standards the marketplace.

Manseeb Khan: I know that you focus on market use cases right. So, what is a key use case for most ICOs that you're seeing?

Gary Schwartz: Yes, you know there's such exciting stories out there of companies that are trying to solve. Using the blocking and we read about them every day. for me I want to get back to you know fundamentals. One of my partners says there's no fun in fundamentals but I personally think that fundamentals are the most fun because people understand them. They will invest in them. So, for me the block chain the biggest use case the block chain is capital formation and as you guys you know as national crowdfunding and FinTech association, you understand the need you know how hard, it is to drive you know capital engagement marketplace. how to create that market that you can get investors to come in and support your ideas like go back to Bill Clinton's campaign. You know I remember James Carville you know who his campaign strategist was.  He coined the expression which was “the economy stupid”. that was getting back to fundamentals. Dude it's about the economy. I like to sometimes just turn off the hype on the block chain and say what the block chain does fundamentally is allows for crowd sales structure globally sort of structure allows for capital formation. That is the underpinning of most businesses that are out there and that's what they need to establish as a bulkhead no matter what. There is no specific dynamic you use cases on the block chain an ICO is about driving engagement around the investor community and around participants.

And why is that so exciting. You guys get this at the NCFA is that a crowd sale or you know reaching what we call a democratized audience has two goals right. One is you're going out to a global community and say invest in me. Right. Here's the value proposition. Here's my white paper. Here's my OM. Here's my you know almost prospectus style document and I want you to invest in me. At the same time because you not going to 100 people to give you a million bucks. You're going to a million people to give you a hundred bucks. You're building a loyalty network of folks that believe in your solution and will use your solutions. The whole crowd sale process and the capital formation process is also a way of evangelizing your solution to the marketplace and creating a network effect and ultimately the investor piece. And you know loyalty to your specific solution and new technology is like the Met cafe network effect right. The more people you get in the more successful you're going to be. And that's why we at Pegasus we like B2B to B2C models because it's exponential growth right you're going from a business to another business that has a community of interest and they are amplifying your use case. So, we love that network effect because it drives investment and it drives and loyal supporters of your solution.

Manseeb Khan: The fundamentals are really like that because there is a lot of hype behind Crypto and there's a lot of hype behind any ICO that you're seeing that up and coming and it's like OK well what does it actually do. how is this going to be an integral part of the block chain.

Gary Schwartz: more fundamentally how is this make money. Exactly. Absolutely right. Explain to me how I am going to get a security token a return and a utility token how is it going to drive scarcity and value in the market explain to me from a fundamentals perspective what is the team? What is the solution? How are you going to make money? who are the initial investors and how is this going to drive democratized flood of investors to the table? What's your long-term strategy? At the end of the day a company that is not going to make it raising capital through traditional means is probably not going to make it on the block chain. block chain not a place you can hide. It's just a way of accelerating a good business use case and that's exciting.

Manseeb Khan: Yes. No, I absolutely agree with you I think because of block chain and everybody's kind of getting exposed is a lot of light being shed and there's slim to none that you can really hide when it comes to starting a crypto, starting a block chain company. Could you talk about regulation and could this be the answer for instability and unpredictability?

Gary Schwartz: When we started Pegasus think a lot of people sort of looked at us the cross-eyed and said What the hell are you doing. I mean the whole beauty of the block chain is there's no regulation. What are you doing talking about regulation? what are you talking doing talking about compliance? And we stayed the course and really 2018, 2019 what we evangelize is become common practice you know an ICO is a new asset class in the marketplace. it's different as it is not unlike a stock you don't have an equity position. It's more like an investment in future success of the company right. But we know whether it be a security token. Looking at the value of that token it's a utility token you're looking for potentially scarcity as a play and demand that utility that will drive up the value. but ultimately the asset cost must be treated. in a way that will drive confidence in the marketplace. If it's a security or treated a security if it's an it's utility you still must treat it as a compliant play. And so, regulation is not only a good idea. It's a central component to the ecosystem. that oversight is there to protect all players. Right. And regulation. Yes, it does potentially slow down certain components of the process, but it also speeds up liquidity and it allows you know feel confident in what they do because there have been bad actors right there. There's no doubt. And so how do you navigate this marketplace?

Gary Schwartz: How do you know that you're swimming in a pond that is that you can feel confident? that the company and the stakeholders are a you know a kosher and that you're not going to get screwed. That's the regulation is important and it's one of our pillars, right? The key is balance because that's So to foster the libertarian values, the block chain you want to drive that fluidity. But you know a little bit of KYC upfront. a little AML making sure that you're on the right exchange. Make sure that you've done the right due diligence on the team that they passed they perps. All these things are fundamentals. These are fundamentals and running a company and the block chain doesn't change that.

Manseeb Khan: I absolutely agree with you the touch a little bit on liquidity right is it crucial for crypto investors to consider liquidity?

Gary Schwartz: Oh yes, I mean you know at the end of the day especially if you're holding a security look how do you make money right. You buy something, you hope that it has increased the value. you hope you get some yield on it some dividend. You hope that whatever you buy grows in value. you believe the business you believe in the marketplace but that value you know even if you have a hard luck mentality and you want to hold that as a crypto gold at some point you've got to pay your bills. at some point.

You want to cash out at some point you want to say look I made you know 200 percent, maybe 300 percent or a thousand percent on my investment. I want to cash out so liquidity with the structure that facilitates. liquidity is essential to consider and essential to offer your community. And so, when you run a nice ICO, you have to put it on an exchange which allows for that liquidity and so there are tons of compliant exchanges that are coming on line. that we work with very closely is the GBX the Gibraltar block chain exchange. which is a utility exchange it's a peer to peer exchange. which is a compliant exchange and we one of the sponsors to that exchange. So, we use that exchange as a marketplace for a number of our ICOs. We do the due diligence, we position them and we on board them onto the exchange because that exchange now allows for that token to trade, to grow in value for the investor or the participant in the situation. to have some sort of approach to value and to exit that value. into other investments or interfere. The World Goes Around everybody's happy right.

Manseeb Khan: No, I totally agree with it. How can I make money right? If I'm going to invest in a coin and I can pull out.

Gary Schwartz: Yeah, I mean to ultimately again as Bill Clinton quote it's about the economy stupid right. It's about how do I get my money right. My money's valuable.

Manseeb Khan: Exactly right. Tell me a little about, some of the ICO's that you're watching and some of the technologies that you are kind of keeping your eye on.

Gary Schwartz: I'm sure you stay all day and talk about all the different ones that I find interesting, but I'll tell mention maybe a few that are from different verticals that I'm excited about with we are participating in as an accelerator. is one technological cabin network cabin spelled K A B N, KABN.network a very exciting play.  For me sometimes you know the gold rush you have to look at the picks and shovels and the KABN is a great play because it is again a fundamental technology .it allows in a very innovative way in the market to grow to accelerate compliance by facilitating KYC AML. So what it does is it allows participants token sale to come in to go through the compliance checks to verify their documentation in an active way , in a bank grade way.  Not only do that only do what's so they hold the registry on the block chain which allows hundreds of thousands if not millions of Accredited Investors to come in do a check and then all ICO has to do is go in and ping the registry and they are either compliant or not. So instead of a lot of the solutions out there focus on doing a sovereign identity check of the consumer. We do it once and put it in a registry so that again you can come back time and time again. And it allows for and facilitates the speed that we need in this marketplace. So that’s a great technology because it's facilitating business as usual in the block chain space. There's another company that is Europe that other working on which is called GEON, geon.network which is a location-based marketing solution. Basically, it allows brands and retailers to mint and mined coins to drive their brand objectives. so, to drive people into their store, to reward people based on being in a certain place and for that again business as usual. we've been using location as a way of driving value for brands for a long time. But there's no way of doing it with a block chain layer. So, these guys allow brands to participate in a block chain to mint and mine their own coins and to reward their customers using a blockchain currency.

There is another company called mortgage blox, B l o x which is again this is such a fundamental business. hey, we will raise capital to invest in real estate. Well here's a 200-million-dollar pool, that is has me tokenize. so instead of going to one or two or 100 investors. you can go to thousands of Accredited Investors and pool those funds. So again, a fantastic use of capital formation. a company which is a spinoff from a hard fork of a ripple called Yaka labs and we're doing a lot of consulting with them in the valley. Another great use case because what they are trying to do is use the ripple backend to create a new coin and you transactional economy for certain global marketplaces. I mean there's so many fun and powerful use cases again you know as an investor and as an accelerator. we look for great teams we look for are really good business plans that we can see how they can generate revenue. how they can scale? how they're going to use network to scale and we know that with those fundamentals and with the compliance that we throw into these deals. we can help them reach the marketplace and hit their capital formation goals. So you know maybe one thing I'll mention because it's come up recently is people think that a lot of use cases out there are frivolous and some of them have had a lot of attention over the last few months sort of waned in participation and a lot of people are sort of nay saying the block chain and I refer to one because it was just put up this week which is crypto kitties basically this collectible game where people collected literally Kitty's.  They used ERC 721 which is basically an Ethereum coin which has certain attributes to allow it to be a collectible, but you know maybe people lost interest in collecting kitties. But the whole idea of digital collectibles is a phenomenal use case. Oh my gosh. You know the Pokémon and on steroids. the opportunity for sports and for music to use this as a new currency to engage with the fans is phenomenal. When you look at something like crypto kitties you don't want to look myopically these things in the actual content use case may have failed but the underpinnings of the technology. the underpinnings of what it can do globally to drive engagement and to make money for Marketplaces that had a hard time raising money on their base. like music, sports need to accelerate the way that it drives mech because cannibalized by fraudulent merchant you can't control that. suddenly these immutable structures like ERC 721 there going to change the way business works substantially. so, I'm hugely excited and so many use cases are out there right now.

Manseeb Khan: I love it. I think the GEON one's very interesting the location-based marketing is very interesting it’s that in Toronto probably is not going to work in San Francisco because San Francisco has a sort of culture of what have you compared to Toronto so that I like that one.

Gary Schwartz People don't change the way run businesses, the way we see value doesn't change the mechanisms for allowing us to make money on that. The structures change my background is more about technology, so I made a lot of money on SMS estimates gave birth to ringtones as a content phenomenon ringtone if you remember them were just a little smidgen of a song.  I mean it was it was ridiculous. Songs were to be downloaded for free on Napster, but you had a pay 5 bucks for a few seconds of a cannibalized version of a course Why. Because they were a business model, around the a closed network which was telecom provider and the OEM the handset will because their business model.  There were billions of dollars of wealth created around the world. well the blockades the same, block chain is another mechanism to create value and create a new distribution mechanism around that. So, if you can create a mutable asset, asset class like ERC 721 you can really exploit that and make you know copious amounts .value in that new model but it's the same business it's the same. at the end of the day we're still humans. we have the same motivations.

Manseeb Khan: I absolutely agree with you. It's like Pokémon way back when and then when Pokémon go came back the exact same thing Could you tell the audience a little bit more about block chain what should we focus on?

Gary Schwartz: One of the big things that people chat about is that the technology will not scale that sort of like you know a one to one panel that every single blocking conference that I go onto. You know it's not scalable.

Gary Schwartz: You know look at Ethereum and look at Bitcoin. Bitcoin 10 transactions a second, Ethereum 25 transactions a second and then everybody turns around and looks at VISA these and says oh well they have a peak transaction rate of 65000 transactions per second. You know we'll never get it. And I've always said you know this is the Internet back in the late 90's your dial up modems and you have these primitive browsers and you have to try and explain it to your mother and she didn't know what the hell you were talking about Nothing new. This is just another wave of technology, which we all know is accelerating much faster than internet.

You know I like to look at you know the advances that we've made even in the last year like your proof of work networks like block chain like Ethereum through there hashing process. It's how they achieve the desired difficulty, through the random number hashing it is a very slow process. And we know that’s not optimal, you know sustainable in network model, but you have new chains like Solana that work fundamentally differently they work by starting with a random hash value and then hashing from the prior hash value which basically makes it much faster to get to consensus right. Guys like that say at least that they can you know do upwards of you know 700,000 transactions per second. You know that's phenomenal. And if they can do that and then they put Visa and MasterCard networks to shame. Right. So, the technology will scale.  And because we have so many smart people that are focused on making this work. because it's a trust-less economy because it's open and it's an open source economy. You have so many people incentivized to make it better and work to make it better. I think that's a crucial piece. You know to throw out there to the audience.  I mean what else to say. I mean we all know that that a lot of people think bitcoin is block chain, but we know that that not the case that block chain is powering bitcoin and fundamentally block chain is an enabler for so many other technologies  But you know ultimately a distributed ledger technology has so much power in solutioning and we've talked about some of the solutions earlier. Scales for me I think is the big one to nail because those are where all the naysayers go whenever they talk about the block chain.

Manseeb Khan: A lot of people may have heard of it in the news. I know I've seen a couple articles here and there Could you talk a little bit more of what impact investors are. And I guess a little bit why it's important to you?

Gary Schwartz: impact investment that's a little bit like me and we thing. it's more the we like. What are we doing here? What are the businesses we're creating?

Gary Schwartz: How is it having impact on our world. How is it having impact on to better our economy to drive sustainability to drive. You know empowerment for women and all those things. Those are crucial, and I think very passionate goals of a lot of people in the block chain give me some examples of how this is going down, but I was born in Africa. I was born in a small country called Zambia. And if you look at those economies and you look at Africa I mean they there is so much graft, there is so much corruption. Money doesn't get where it needs to go and even if it gets there the process is also cumbersome. And there's no transparency, there is no efficiency in a lot of the solution in the block chain really can make a difference it can it can help. And this is not just Africa, but it can help with you know security and transparency and voting. You know which a big thing is obviously globally. Voting fraud and optimizing that process Accessing ownership of data, medical data. how do you in a lot of these places. There's no I.D. So how do you identify somebody. How do you create some sovereign wallet which with? which can hold their personal information, so that they can get information, can be connected to them in a more efficient way. Obviously, land is a big thing in Africa. So, the reliability, reliable secure you know a land registry are essential. And then you know the whole idea of managing money.

Your audience knows about M-Pesa and other payments. But in Africa you can use your phone to transfer money through SMS is called M-Pesa. And again, a primitive solution that is solved so many problems for the continent. Well those a digital wallet using and M-Pesa. Now can it can be a distributed ledger. So that not only are you using your phone to move money, but you're moving money which is tokenized. which can be controlled in such a way that it doesn't end up as graft it gets directly to a farmer. The farmer uses that. that it doesn't get affected by the vicissitudes of the local currency. This is exciting stuff and it empowers women because it gets to farmers which are much part of you know women in market place that's just an example from Africa. But this is happening all over the world. We're optimizing urban cities, we're creating solutioning around and micro loans. A guy I know in Berkeley in the U.S. is trying to put together a solution to solve for solutioning around a municipalities in Berkeley. looking at bonds optimizing process you see taking out the guns the existing solution and getting more money to the end recipient. So, to all these that this stuff is part of this new economy. The distributed ledgers allow for optimization of certain business processes and transparency. And so, it's a brave new world it's very exciting.

So, imagine using remittance services to send money from one country to another. you have to go to a money market. You have to pay a service fee. first, you must take a time of your day to go somewhere. Physically you must send money with the fee. It takes a long time to get to the end. The other person must go to the next town potentially to pick it up. They pay there's their exchange rates. It's an it's a mess.so this time and there's capital impact. well if you using the you know the block chain as a remittance service. That huge efficiencies because It's instantaneous. There are fewer hands in between two to take fees and you don't have the same issues with the arbitrage on currencies and so you don't get dinged on the FX. So those exciting things that we all know need to change and are changing as we speak.

Manseeb Khan: I absolutely agree with it. So, to wrap this up Gary could you give us some tips on an ICO structure.

Gary Schwartz: No absolutely. I mean that's sort of I guess that's a really good way of summing up because really you know all of this comes down to running a good initial coin offering. We talked about a lot of those elements compliance make sure the team your team, it's a good business model. It's a good block chain use case. There's a market for that use case that that you put it you structured in such a way that there's liquidity for investors. All those things are key. But we maybe one of the things I'll leave you with then is to talk about. difference maybe between what I would run as a startup and how the block chain and for me. When I run startups the last 20 years I never really care too much about the advisor. A quick cohort around me it was all about my core team. But with a block chain thing are different and this is one thing that strikes me is when somebody at least when you're a Crypto investor and investing in an ICO. You know they may read the white paper they'll probably actually just read summary, but they look for certain shorthand due diligence when they when they are looking at an ICO.

And one of the things that they look at and they there's a lot of scrutiny on is the advisers that you have in your ICO. And it's interesting for me because yes, it's important to have advisers is no doubt and to have you know good people around you in any business no doubt. But for some reason in the ICO world because this is a global economy. People are moving very fast on decisioning they are looking at who's in it now. who is advancing things initially you would look at early investors in ICO that would be then advisers to the ICO as a shorthand way of seeing a credible and investing with them. But now you know I think there's a bit of maturity now. You're looking for advisers who explain your business that they come from the vertical that you pushing into. and that that's all good. But it is important to build, narrative around those advisers. so that when somebody comes to your ICO and they and they are paging down and they see the description of the business and they see that is they read.

Again, the probably the summary the white paper and they go through things and they get to the advisers. It needs to tell a story and it needs to tell a story that it really screams credibility. It shows that that you have stakeholders in there that not just stakeholders that have invested in you but that are known in the investor community it can be which is obviously very important. But also, people who understand your business and having them attached to your business really speaks to the credibility of your business. So, for example if you have a location-based marketing know arena. you'd want to have people in there that really can talk to and brand engagement. If you're in the payments base in the identity space like KABN you want to make sure that you have people in there have a background in identity in record management, in payments from the incumbent world that speak to the fact that that you nailed this. that's probably one thing that I think we all know it's important. But I think it's probably one of the most important things in fashioning your narrative to the marketplace.

Gary Schwartz: we could speak for hours but this kind of cool and we touched on some fun things and hopefully you'll invite me back and we can take a deep dive into some other areas.

Manseeb Khan: Oh no I can't wait. I'm so excited for that they are a sponge. I want to learn as much as I can. ` from amazing people like an industry. So, Gary thank you so much for sitting down with me today.

Manseeb Khan: This has been an amazing time. I learn tons I'm pretty sure the audience has learned a lot. And thank you so much for dropping by. And I can't wait to have you again.

Gary Schwartz:  Yeah. If I could just end up just if anybody wants to reach us and find out more information just go to Pegasusfintech.com. So that's one-word Pegasus as in the flying horse and fin tech dot com. look forward to being heard from anybody if you want to directly reach me it's gary.schwartz@pegasusfintech.com

Manseeb Khan: So, on the behalf of the NCFA Canada's leading crowdfunding fintech association we wish you an amazing fintech Friday and weekend.

 

End of Podcast

 

Interested in getting involved as a partner or participant? info@ncfacanada.org

 


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

Forbes | Gerald Fenech | Dec 12, 2018 The crypto space, though promising in a myriad of different ways still has many obstacles to overcome. Bad actors are slowly being weeded out but at an excruciating pace. Ideally, the crypto space would have so much competition, innovation and use cases that the best ideas and best innovators would naturally stand tall. Though 2018 has been a trying year for everyone in the space, 2019 is looking positive as many promising projects are rearing to go. These neophytes, though not experienced are seeking to close the gaps within the crypto space that have lingered since the beginning, namely; security, accountability and transparency and above all, practical implications for the technology. Countries like Gibraltar, Malta, and Switzerland seeking to build legislative frameworks for these new businesses to operate and thrive in, and give them a home. However, it is a difficult balance; on the one hand to regulate, securitize and make everything compliant, whilst also not stifling budding, inherent innovation. Although everyone recognizes that DLT has huge potential, the time has now come for the space to mature, become regulated and for things be done right. Now is the time to forget the ...
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The Security Token Field - The Next Step After the ICO Annihilation?
Bloomberg | Julie Verhage and Jennifer Surane | Dec 10, 2018 In 2018, a number of financial technology startups came into their own. Free trading platform Robinhood Markets Inc., for example, added new services and billions to its valuation. And Stripe Inc. was valued by investors at a price higher than the market caps of 249 of the companies on the S&P 500 Index. But the industry is also maturing and consolidating, and larger industry players, hoping not to be left behind by the new era of digital finance, are stepping up their hunt for acquisitions. What should we be on the lookout for in 2019? According to the fintech pros surveyed by Bloomberg—more deals, swirling IPO rumors and a continued steady stream of checks from venture capitalists. Here’s a wrap from industry experts. (Quotes have been lightly edited for clarity and length.) See:  OSC Seeks Applications for Fintech Advisory Committee IPOs looming Up to this point, financial technology startups have been hesitant to enter the public markets. And who can blame them? Most fintech companies that have gone public in recent years have seen their share prices tumble, and ample venture capital funding has buffered balance sheets. Still, a major IPO ...
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Experts predict the five big fintech trends of 2019
Coinsquare release | Dec 6, 2018 The acquisition was closed for $12 million CAD and brings the leading cryptocurrency wallet on the Stellar platform into the Coinsquare ecosystem TORONTO, Dec. 6, 2018 /CNW/ - Today Coinsquare, Canada's premier cryptocurrency trading platform for trading Bitcoin, Ethereum, and other cryptocurrencies, announced it has acquired BlockEQ, the leading cryptocurrency wallet on the Stellar network. Coinsquare purchased BlockEQ for $12 million CAD and will leverage BlockEQ's technology to help Coinsquare and its users connect further with the world of cryptocurrencies. See:  House Finance Committee Urges Canadian Government to Regulate Cryptocurrencies "We have enormous respect for what the BlockEQ team brings to Coinsquare," said Cole Diamond, CEO of Coinsquare. "They are one of Canada's best tech teams, and the product they've built is immensely valuable. That combination in partnership with Coinsquare's technology and team means that we have the opportunity to build amazing things for the cryptocurrency community in Canada and far beyond." BlockEQ, which was co-founded by Jonathan Lister, Megha Bambra and Satraj Bambra, is a cryptocurrency wallet that empowers users to buy, trade, and hold cryptocurrencies in a secure manner. It allows for the tokenization of crypto assets in order to allow them ...
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Coinsquare acquires BlockEQ to expand its cryptocurrency offerings
OSC Release | Dec 6, 2018 TORONTO – The Ontario Securities Commission (OSC) is seeking applications for membership on its Fintech Advisory Committee (FAC). The FAC advises OSC LaunchPad staff on developments in the fintech space and the challenges faced by start-ups in the securities industry.  OSC LaunchPad is a dedicated team that engages with fintech businesses, provides guidance and flexibility in navigating securities regulatory requirements, and works to keep regulation in step with digital innovation. The FAC will meet quarterly, with additional meetings as required. The FAC is chaired by Pat Chaukos, Deputy Director, OSC LaunchPad, and will consist of up to 15 members. Membership terms will be for one year.  Members will be selected based on whether they have direct experience in one or more of the following: Digital platforms (e.g., crowdfunding portals, crypto-asset trading platforms, online advisers); Crypto-assets or distributed ledger technologies (e.g., blockchain); Data science or artificial intelligence (AI); Venture capital, financial services, securities, legal or accounting experience with a focus on the fintech or technology sector; Fintech or technology entrepreneurship; Compliance or regulatory technology (RegTech) solutions; or Cryptography or cybersecurity. See:  OSC outlines key areas of focus for 2018-2019 Interested parties should submit a résumé indicating their ...
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OSC Seeks Applications for Fintech Advisory Committee
Coindesk | Nikhilesh De | Nov 30, 2018 Members of VanEck, SolidX and the Cboe BZX Exchange met with U.S. Securities and Exchange Commission (SEC) staff earlier this week to present a new argument on why the bitcoin market is ready for an exchange-traded fund (ETF). In the latest push to convince the regulator to approve a rule change which would open the door for the country’s first bitcoin ETF, the three firms met with the SEC’s Division of Corporation Finance, Division of Trading and Markets, Division of Economic and Risk Analysis and Office of General Counsel. Notably, Monday’s effort differed from previous presentations, which took more of a regulatory focus. See:  OSC approves Canada’s first blockchain ETF Instead, the proponents’ argument centered around the idea that the bitcoin market is mature enough to support an ETF, and at present looks similar to markets for other assets which already have such products. The presentation gave several examples of assets that already have ETFs, including crude oil, silver and gold. The presentation specifically tied the idea of futures markets with spot markets, noting that for money substitutes such as gold and silver, this connection between the two can be proven with empirical ...
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Bitcoin ETF Seekers Met With SEC Monday In Latest Pitch for Approval
Investment Executive | By James Langton | Nov 23, 2018 Many hurdles remain for the CMRA before it becomes a reality Canada’s regulatory landscape faces a transformation as politics, shifting priorities and new legal realities push the investment industry’s overseers in new directions. Most obviously, the prospect of a fundamental reshaping of the regulatory framework in Canada now is, at least, a possibility – given the Supreme Court of Canada’s (SCC) long-awaited decision on Nov. 9, which reversed a lower court’s ruling in Quebec, that declared that a proposed federal/provincial model for a co-operative capital markets regulator is constitutional. But while this decision knocks down a basic legal obstacle for the new model for overseeing the securities industry, that doesn’t mean that the adoption of a co-operative regulator is imminent – or even inevitable. Indeed, the SCC’s decision hints at the significance of the hurdles that still must be cleared before the proposed Capital Markets Regulatory Authority (CMRA) can become a reality in Canada. Although the SCC has found that the proposed CMRA model is constitutional, that doesn’t necessarily mean it is a good idea. “It’s up to the provinces to determine whether participation is in their best interests,” the ...
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Not yet a done deal
Forbes | Lawrence Wintermeyer | Dec 2, 2018 If your professional interests take you to the crossroads of financial services, regulation, compliance, and digital - especially data analytics and machine learning - which altogether is known as regtech, you are in the right place. You are part of statistically small and very geek-oriented professional community, but you know this, and though you might choose not to admit this to strangers at this year's festive parties for fear of causing great pain by boredom, you are in good company with this Contributor and my interviewee. I first met Jo Ann Barefoot when I was chairing the U.K. Financial Conduct Authority (FCA) Industry Sandbox Consultation, where she provided excellent guidance and insights. Jo Ann is one of the most dedicated and busiest advocates of the regtech space on the planet and is truly outstanding in both her knowledge and passion in this area. She dedicates her time to a number of global bodies and initiatives related to regtech: she is a Senior Fellow Emerita at the Harvard Kennedy School Center for Business & Government, a Senior Advisor to the Omidyar network, sits on the fintech advisory committee for FINRA, is an Executive Board Member of the International RegTech ...
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A Regulation Revolution In Financial Services
NCFA Canada | Nov 23, 2018 JOIN US ON A STORYTELLING JOURNEY EVERY FRIDAY. Ep19-Nov 23:  Future of Business Tokenization - How Blockchain Challenges Concept of Money About this episode:   On this episode, NCFA Fintech Friday's host Manseeb Khan sits down with Alan Wunsche the CEO of TokenFunder. They chat about ICO's funding startups, tokenization of businesses and buying real estate through tokens. Enjoy! The future of business tokenization How tokenization is going to disrupt real estate and auto industry How blockchain challenges the concept of money Host: Manseeb Khan, NCFA, Fintech Fridays show host Guest:  ALAN WUNSCHE, Founder and CEO, TokenFunder (view Linkedin) Bio:  Alan Wunsche is CEO & Chief Token Officer of TokenFunder, a regulatory-compliant blockchain venture funding platform with Ontario's first regulated Initial Token Offering. He is also Chair & Co-Founder of Blockchain Canada, a Canadian federal not-for-profit corporation with a mission to connect Canadian Blockchain Innovators and to help Canada be a leader in blockchain technology. Alan is a finance technologist focused on new blockchain business models and the disruptive impacts of blockchain on global wealth distribution. He brings hands-on technology experience as a finance and risk transformation executive at a global bank (Scotiabank), management consulting (Deloitte, PwC), and ...
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FINTECH FRIDAY$ (EP.19-Nov 23):  Future of Business Tokenization - How Blockchain Challenges Concept of Money with Alan Wunsche, Founder and CEO, Token Funder
CBC News | Nov 23, 2018 More than 3,000 people contributed to campaign to buy new installation from renowned Japanese artist LET'S SURVIVE FOREVER. That's the name of the infinity mirrored room the Art Gallery of Ontario plans to purchase from world-renowned artist Yayoi Kusama — that is, if its crowdfunding campaign is successful. And yes, it's always spelled in all-caps, the Art Gallery of Ontario (AGO) said. Over 3,000 people have already chipped in a contribution to permanently acquire the brand new Kusama installation, even though they hadn't seen it until now. The AGO said its campaign has brought in around half of the $1.3 million it needs to buy the work, but it's hoping more people donate on next week's "Giving Tuesday," a day devoted to donations following "Black Friday" shopping. Here's a look inside the room: The major installation, which will be given a special place at the downtown Toronto gallery, features mirrored orbs on the ground and suspended from the ceiling — similar to the work Narcissus Garden, which dominated a large room in the AGO during last year's ultra-popular Kusama exhibit. There's also a mirrored rectangular column inside the LED-lit room, which creates what's said to feel like an infinity room inside an infinity room ...
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Art Gallery of Ontario shows off the Yayoi Kusama infinity room it's crowdfunding to buy
CNBC | Eric C. Jansen, president and chief investment officer of Finivi | Oct 31, 2018 The many big companies disrupted by blockchain have now made it a priority to harness this technology. Large firms such as Accenture, Facebook, Google, IBM and Microsoft are developing patented products and services based on blockchain's digital-ledger open-source technology that can be accessed and adapted by anyone. Ironically, the whole raison d'etre of blockchain is to circumvent the very type of centralized authority these traditional tech companies represent. Development efforts in both private and public blockchain are seeking to forge new business models. As is typically the case when faced with disruption, large companies are seeking to defend their territory by adopting the very tool that threatens them. With blockchain there's a lot at stake. The global market for blockchain-related products and services is about $700 million and is projected to exceed $60 billion annually in 2024, according to Wintergreen Research. Among the big corporate blockchain players are Accenture, Facebook, Google, IBM and Microsoft. These firms are developing products and services based on blockchain's digital-ledger open-source technology that can be accessed and adapted by anyone. Blockchain enables global transactions between parties without going through ...
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Blockchain's potential will continue to spur public and private investment

 

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