A new Tokenized Debt Offering by Cadence and Kik plans to challenge the SEC over its ICO

Each week we share the latest news in the Security Token industry. This is newsletter #21 — subscribe here to get it in your inbox every Thursday.


How does the tokenization of SME equity work in the Netherlands?

You can find out in our latest report, titled Tokenizing SME Equity.

In the report, we discuss tokenized depositary receipts, the prospectus directive, dividend payments, shareholder voting and much more.

Want to read it? Simply send us a message at contact@infloat.co and we’ll send it your way.

QUOTE

At least 2 Security Token trading ATS platforms are live: tZero and OpenFinance. Now what institutional and individual investors want to see is liquidity. Issuers also have to work on it. One of the ways being through market makers, or all the tokenization is useless.

— Leaseum Partners CEO Steve Sillam on Twitter

NEWS

📢 Alternative investment platform Cadence funded its firstpublic tokenized debt offering: a $500,000 structured note with an annual yield of 10.53%. Take a look at the [very interesting] case study.

📱 Social media platform Kik plans to fight an expected enforcement action from the SEC over their $100m ICO in 2017, saying the Kin token is not an unregistered security. Here’s the article from WSJ (behind a paywall), and Kik’s letter to the SEC.

🌊 Companies Propellr and Fluidity, who we know from the $30m tokenized real estate project in Manhattan, have joined to create Fluidity Factora. The new company will tokenize new (financial) assets, create deals, and offer trading services.

👛 Tokensoft launched the beta version of its Knox wallet, calling it “the first custody solution for digital securities”. The wallet supports ERC-20, ERC-1404, DS-20 (Securitize), ST-20 (Polymath) and Harbor’s R tokens.

🐦 Polybird released the beta version of its crypto exchange, said to also facilitate security tokens in the future.

🔐 Fidelity Investments is expected to launch a Bitcoin custody service in March. The solution will be offered to a select group of institutional investors.

LONGER READS

🏢 Law firm Dilendorf & Khurdayan wrote an article on equity tokenization. They discuss the type of shares, the corporate structure, and other practical considerations.

🎙️ An interview with Vincent Molinary, CEO of broker-dealer and ATS Templum Inc. on the role of legislators, private vs public blockchains, and digital asset custody.

NEW STOs

⚕️ NASDAQ-listed biotech company Agenus Inc aims to raise between $50 and $100 million, with the help of Atomic Capital. The token issuance will fund product development of an anti-body named AGEN2034, and investors will receive returns based on future product sales. Interestingly, the drug is now in clinical trials and not yet approved. Plus, notice the CEO saying the securities have “nothing to do with cryptocurrencies”.

👪 Social crypto trading platform Blockport is planning to issue a security token, aiming to raise a minimum of €15m for further expansion. The token will be offered to investors in both the US and Europe.

🏅 London-based crowdfunding platform CrowdForAngels has listed the security token ‘Sports Investor Coin’. Sports Investor Limited is aiming to raise between £300k and 500k to acquire sports sponsorship assets. Investors will receive dividends from the total asset portfolio.

POSTSCRIPT

Steve Sillam (from the quote above) has a point. Liquidity is needed to convince investors of the benefits of tokenized assets, while we also need investors to create this liquidity.

In an (admittedly simplified) way, it’s the old chicken-or-egg marketplace problem. A quick Google search results in tips like “Provide an economic incentive”, “Act as a producer”, or “Make one side look bigger than it actually is”.

We wonder how many of these tactics can and are currently used by players in the security token space. If you have any thoughts on this, we’re happy to share them.

See you next week! 👋