Fintech Enroute: This Week’s Industry News
Celebrities Slammed With SEC Fines for ICO Promotion
The SEC’s existential crisis regarding ICOs and its struggle to curb fraudulent activity related to token offerings has recently claimed two unexpected victims: Floyd Mayweather and DJ Khaled. These two media icons had announced their purchases of tokens in an ICO run by a company called Centra on various social media platforms. When the SEC found that Centra had violated securities laws in their offering, the company was fined along with Mayweather and Khaled who drummed up a significant portion of interest in the offering. Mayweather and Khaled both agreed to six-figure fines without responding to the truth of the SEC’s allegations.
This most recent taking of names comes as the SEC has remained extremely indecisive on its classification of tokes as securities. The SEC warns, in blanket statements, that tokens in ICOs might be considered securities and, as such, might be subject to securities laws. The American financial regulator has yet to make public the exact criteria that an ICO must meet in order to be classified as a security. The SEC might have good reason to hold its tongue, however, until the market matures somewhat. But waiting too long might be problematic and cause many hardships for speculators.
Read more here:
Nasdaq and Investment Manager Partner To Bring Regulated Crypto Derivatives to Market
Nasdaq, the world’s second largest stock exchange, has partnered with investment manager Van Eck to offer a litany of financial products linked to cryptocurrencies. The partnership hopes to leverage Nasdaq’s existing fraud prevention technology called SMART to create a cryptocurrency derivatives market that can be regulated. Their ultimate goal is to foster trust and confidence in the viability and legitimacy of crypto-backed products among regulators and financial institutions alike.
So far, only CBOE and CME have been approved by the CFTC to offer regulated crypto-based futures contracts. This new partnership is promising because Nasdaq’s market is far larger than both CBOE and CME and Nasdaq is partnering with an investment firm as opposed to exchange operators such as CBOE and CME. Van Eck already offers a diverse range of products to its clients from ETFs to actively managed and alternative investment strategies. Allowing regulators to start from a familiar place, namely Nasdaq’s SMART framework, in their attempts to govern the crypto “Wild West” might help too.
Read More Here:
https://www.coindesk.com/nasdaq-vaneck-partner-to-launch-crypto-2-0-futures-contracts
First Blockchain-Based North Sea Oil Trading Platform Rolled Out
A consortium of oil companies such as Shell and BP and a handful of futures trading firms rolled out Vakt, a blockchain-based trading platform, on Wednesday. The exchange reported that no trades had been logged on the first day it opened, but that the exchange is up and ready to receive orders and execute trades. Currently, the platform is only open to the firms that were involved in its establishment, but promises to become available to the wider market next year. Although Vakt currently only supports the trading of positions on North Sea Oil, which are used to calculate the benchmark Brent Crude, its stakeholders promise that they intend to open it up to other commodities markets.
Blockchain-based trading platforms are heralded by many players in derivatives markets for their potential low costs, efficiency, and protections against fraud. That thesis will be tested by Vakt’s performance. The exchange’s ability to lower profit margins substantially without upsetting systemically important market makers will also be put to the test.
Read More Here:
