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ICO Project Polymath Is Trying to Buy a Stake In a Real Stock Exchange

If one announcement summarizes the ambitions of crypto project Polymath, it might be Wednesday’s acquisition of the domain “Tokens.com”

One of its several this week, it cuts to the heart of the project’s aims to dominate the issuance of tokenized securities. But the plans go beyond just the acquisition of potentially popular domain names.

In the run-up to the company’s Wednesday morning appearance at CoinDesk’s Consensus conference, Polymath also revealed it’s in the process of closing a deal to acquire a large stake in the Barbados Stock Exchange and that it’s working on a deal with the alternative trading system tZero.

With those two partnerships, it believes it will have the platform to create tokens that can actually trade and dominate the coming transition of traditional equity to crypto. Neither deal is done, but Polymath CEO Trevor Koverko projects that they should be closed by early June. (Polymath raised $58.7 million in a private placement of tokens to accredited investors, according to Business Insider.)

Koverko sees a crisis of liquidity in security tokens. As CoinDesk previously reported, many of the tokens issued so far are under a lockup period required by U.S. securities regulations, but Koverko argues that’s not the whole story.

“It’s also because everyone’s scared to release them in the wild because you can’t prevent unaccredited people from getting them,” Koverko told CoinDesk. “What we’re doing is we’re bringing a measure of restraint and typical Wall Street-like compliance.”

Polymath has built a system that makes a whitelist of accounts that have gone through the know-your-customer, anti-money laundering (KYC/AML) and investor accreditation checks that make them viable to trade with. That way, once a token has been issued on Polymath, it shouldn’t be possible for an unaccredited investor in the U.S. to acquire it.

It’s calling this ST20, which it describes as a new standard for security tokens. For now, these tokens will be issued on the ethereum blockchain (it is not actually an ethereum standard). The company has partnered with SelfKey, IdentityMind and Shyft as its KYC/AML partners.

Polymath is one of several companies that have jumped into the token issuing space, which grows more crowded by the week. The firm describes itself as a platform, one that brings in companies and guides them through the process of issuing a security token. The companies with the strongest proposals will get access to elite consultants, legal counsel and possible investment from Polymath’s new security token fund, which it also announced this week.

One of Polymath’s partners, Gabriel Abed, founder of Bitt, a Caribbean platform for mobile money, explained the value of a crypto exchange in the country. “Barbados has the most double tax treaty agreements in the world.”

That means that if a company pays tax in one country, it doesn’t have to pay tax in the other. “It’s quite cool as well when you look at the China relationship that Barbados has,” because so many Chinese companies have needed to look abroad as domestic regulations have banned new token issuances, he said.

Bitt is in the family of companies, like tZero, that have investments from Patrick Byrne and Overstock.com. Abed is working to negotiate the use of TZero’s backend to run a crypto specific exchange out of the Barbados Stock Exchange.

Once the exchange is running, it will be a ready place for new tokens to trade, with guarantees built into the ST20 platform that no one will be able to hold them that shouldn’t. Koverko anticipates equity and real estate to begin quickly moving onto the platform. He also sees opportunities for people in the developing world with capital but without local financial infrastructure to make investments.

Just as Africa skipped the landline phase and went straight to mobile, Koverko envisions a mobile-based capital market there as well.

The Barbados Stock Exchange and tZero had not confirmed the deals in process at press time.

Turtles in Barbados photo via Shutterstock.

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Overstock Venture Arm Invests $3 Million in Blockchain Payments Startup

Bitt, a Barbados-based blockchain payment startup, has announced a $3 million investment from Overstock’s venture capital subsidiary, Medici Ventures.

As part of the new deal, Medici Ventures has agreed to buy additional 8.6 percent stake in Bitt, following a previous $4 million invested by the blockchain VC firm in 2016.

In a release published today, Bitt said the new fund will help further develop its payments solutions, aimed at bringing financial inclusion for residents in the Caribbean region.

“These are very large issues in developing countries and success in Barbados will effectively signal to others in the region that persistent issues related to, for example poverty and large informal sectors, can be tackled to the benefit of economic development,” said Rawdon Adams, Bitt’s CEO.

To achieve its goals, Adams said the new funding will be spent on advancing its new mMoney digital wallet and central bank digital currency solutions, as well as hiring more developers to support product growth.

As previously reported by CoinDesk, Bitt launched a blockchain-based version of the Barbadian dollar in early 2016 that aimed to serve underbanked residents.

Adams added that, in the move towards commercialization of its central bank solutions, the firms is eyeing further pilot projects in collaboration with central banks in the Caribbean.

Dollars image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Prime Minister's Son to Head Barbados Bitcoin Startup

Bitt, the blockchain payments startup backed by Overstock’s Medici Ventures, has announced the hiring of a new chief executive officer.

The new CEO, Rawdon Adams, takes the helm of the Barbados-based startup just months after it unveiled an ambitious plan to develop a pan-Caribbean settlement network built with blockchain tech. The plan, Bitt said in May, is to create a way to better connect a region with more than a dozen governments, each with their own currency systems.

The startup has also worked with the Central Bank of Barbados on pilot blockchain initiatives.

The appointment of Adams adds heft to the startup’s regional plans. Rawdon is the son of Tom Adams, who served as the country’s prime minister between 1976 and 1985. Tom Adams, in turn, was the son of Sir Grantley Herbert Adams, the first and only prime minister of the former West Indies Federation.

According to LinkedIn, Rawdon previously worked as an analyst for GE Medical Systems and founded market arbitrage software startup ArbMaker in 2008.

Jonathan Johnson, president of Medici Ventures, said in a statement:

“Rawdon is the perfect leader to grow and scale Bitt to the next level and bring to fruition Bitt’s initial vision in the Caribbean.”

Overstock, through Medici, invested $4 million in Bitt in April of last year.

Tropical beach image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].