Crypto News for The Rest of Us: 11/13/17

Big week in cryptocurrencies, decided to do a round-up for non-technical people. Enjoy. (For the beginner — and don’t worry, you’re not alone — start here “Why Bitcoin is Important”)

ICOs and Regulations

Just in 2017, ICOs have raised $2.7B and 18 have raised more than $100M, while 120 have raised up to $50M. In the past five months, ICOs have raised more than $350M each. To put that in context, ICOs raised 32% as much as Series A startups in the last quarter alone. link

ICOs are hot, hot, hot, but … what about regulations?

During Singapore’s FinTech Festival, the Singapore government revealed their new ICO regulations. Unlike China, Hong Kong, Vietnam and South Korea that outright banned ICOs, Singapore’s central bank: the Monetary Authority of Singapore (MAS) published a document to clarify SG’s ICO standards. 1, 2

Meanwhile Japan, the US and EU are still in ‘discussion’ mode with the SEC issuing warnings, sending alarm bells to those looking to jump on the ICO train. 1, 2 (There was even a discussion of ICO purchases being entitled to a refund by law? America is so adorable.)

Reading through the Monetary Authority of Singapore’s 13 page document, the terms are a bit fluffy and serves more as a guide than regulations of what specifically defines as an ICO. Lots of loopholes and workarounds are still possible but the report’s objective is to prevent scams and “combating money laundering and terrorism financing”. (Sure, good luck with that. But how about understanding the technology first, before layering rules?)

What you need to know about SG’s definitions of when ICOs are or aren’t securities:

  • ICO trading platforms require vetting and a license issued by MAS
  • some digital currency issued during ICO campaigns (or what are called ‘shit coins’ — alt coins aside from the well known ones like Bitcoin BTC, Bitcoin Cash BTH, Ethereum ETH — that are super minor) may possess characteristics of ‘normal’ currency and must publish a regulation-compliant investment prospectus and register it with the central bank.
  • there are exceptions to the rule including: if the ICO does not exceed S$5M within a 12 month period, offer is made to institutional investors only, and the offer is made to accredited investors under SG’s prescribed investor class.

These discussions of regulations by the big guys is an indicator of normalizing cryptocurrency, but I can’t help but think of how the promise of cryptocurrency are how 1. transactions happen collaboratively 2. secure because they are backed by technology and 3. without central points telling people what to do and how to do it (and without all the fees).

In other crypto news:

Notable Partnerships, Movements in Regulatory Systems, Alliances

  • AMEX announces partnership with Ripple, a crypto payment’s platform
  • MasterCard finally jumps on the blockchain payment bandwagon filing a patent in the U.S. for their platform link
  • KPMG joins the Wall Street Blockchain Alliance — a 501(c)(6) non-profit trade association. link
  • 20 global banks and financial institutions join Singapore and Hong Kong’s blockchain based network — no clear indicators of the implications yet link

Products and Services

  • VISA in partnership with the blockchain startup Chain, rolled out B2B blockchain payments. VISA is already partnered with U.S.-based Commerce Bank, South Korea’s Shinhan Bank, the Union Bank of Philippines and the United Overseas Bank, based in Singapore. link
  • Square’s Cash app is testing a feature to buy and sell bitcoin (only for U.S. users) link

Reports for PowerPoints

  • Deloitte scoured GitHub and published a report from the data so we don’t have to. The report is long and nerdy but there are some handy charts on there in case any of you MBAs need it for a PowerPoint 🤗 Find the report here.

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Any and all feedback, questions, and thoughts are welcome — simply reply to the newsletter or tweet me. Big shout-out to Jeff H., Jon Russell,Daryl S., and Dave McClure for invaluable insights and help.