STOs and Security Tokens Are the Future of Crypto-Funding
Recent News from Coinbase, SEC, and Fidelity All Point to a Healthy Transformation Taking Place
Coinbase has officially acquired a broker-dealer license and is awaiting SEC approval to begin trading cryptocurrency securities. As one of the largest exchanges in the crypto space, registering with the SEC demonstrates Coinbase’s commitment to remain a leading figure for the industry as a whole. It also highlights a pivot toward an inevitable increase in regulatory compliance across all facets of this currently confusing crypto-sector.
While crypto exchanges are currently endeavoring to adopt a more Wall Street style playbook, traditional financial institutions such as Fidelity Investments are working in the opposite direction. It was recently discovered that this specific multi-trillion dollar firm has been shopping for engineers to establish a “Digital Asset exchange”. And in the past, Fidelity’s CEO Abigail Johnson has stated she is one of the few people “from a large financial services company that has not given up on digital currencies.”
So as the new school crypto-finance platforms race to become SEC registered and the old school Wall Streeters work their way into the crypto space, a sort of middle ground is forming. This trend is prevalent in Goldman Sach’s opening of a crypto-desk, ICE’s (the NYSE parent company) offering of bitcoin swap contracts, and the recent SEC publicity regarding crypto and ICO regulation. And the migration away from ICOs and toward security token sales or STO’s is certainly at the center of this new middle ground.
SEC Chairman Jay Clayton has declared that the definition and rules regarding securities will not be changing in order to appease ICOs or the crypto-community. He specifically noted that almost all ICOs that the SEC has looked into are technically offerings of securities. That means that all ICOs will be regulated, and the days of the free-for-all utility token fundraising are quickly coming to an end. Crypto-fundraising will continue to thrive, just in a new, healthier, and more stable condition.
With that in mind, we’re currently pivoting SupplyBloc away from our initial plans for a pre-ICO sale and have started the process for creating an SEC complaint Security Token Offering. This decision marks our commitment to protecting our investors as well as the lastingness of our project and the blockchain startup industry altogether. We see this industry shift as both unavoidable and beneficial and we’re doing our part in streamlining the transition.
With Coinbase making public moves toward trading securities and Clayton’s recent statements on ICO’s, it’s becoming quite clear that the future of this market lies in security tokens. This transition into a fully regulated market will likely be somewhat messy at the start, but ultimately, SEC compliance is the surest way to promote the health and longevity of cryptocurrencies. SupplyBloc will be issuing a security token via our STO in order to be at the forefront of this regulatory evolution while protecting the best interests of our valued investors.
