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Funding Platform SeriesOne Partners With Polymath to Use Its Security Token Protocol

American crowdfunding portal SeriesOne partnered with Polymath to enhance raising capital via its security token protocol.

United States-based crowdfunding platform SeriesOne has partnered with security token protocol platform Polymath, according to a press release published on March 19. The new partnership intends to create a digital securities offering ecosystem via the SeriesOne platform.

According to the press release, the partnership between SeriesOne and Polymath will let token issuers create and manage regulatory-compliant security tokens from the initial offering stage to trading on a secondary exchange.

SeriesOne CEO Michael Mildenberger expressed confidence that Polymath’s security token protocol, ST-20, is set to improve the process of raising capital on the platform.

Polymath’s ST-20 protocol is a token standard that is designed specifically for issuing and managing security tokens. ST-20 represents an extension of the Ethereum (ETH) blockchain-based ERC-20 protocol. Unlike ERC-20, however, ST-20 “embeds regulatory requirements into the tokens themselves, restricting trading to verified participants only.”

Polymath explains that its ST-20 standard is a solution to the problem of regulatory compliance when dealing with securities, since the protocol enables restrictions for policies such as Know Your Customer (KYC) and Anti-money laundering (AML). According to Polymath, ST-20 tokens are backward compatible with ERC-20, providing interoperability with most existing blockchain infrastructure.

The partnership was revealed just as SeriesOne officially announced that it is partnering with major South Korean crypto exchange Bithumb to build a digital securities exchange. The partnership was first reported in November of last year.

Recently, blockchain security firm and wallet service BitGo announced support for Blockchain Capital’s ERC-20 security token BCAP, launched in a $10 million initial coin offering back in April 2017.

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Insurance Giant AXA XL Launches Security Token and Crowdfunding Insurance Service

Insurance Giant AXA XL partnered with insurance technology startup Assurely to jointly launch a new insurance product covering equity crowdfunding and security token offerings.

Insurance giant AXA XL and insurance technology startup Assurely have jointly launched a new insurance product covering equity crowdfunding and Security Token Offerings (STOs), according to a press release published on March 6.

The new product dubbed CrowdProtector is designed for issuers and investors, and purportedly protects new online capital formation strategies like equity crowdfunding and STOs. The product also aims increase trust, confidence and safety to potential investors guaranteeing that the issuer is insured. According to Ty Sagalow, CEO of Assurely, the parties have managed to increase underwriting. The releases states:

“CrowdProtector provides Issuers protection against investor complaints and lawsuits as well as serve as a communication to investors that they may get their principal investment returned should the issuer misuse the funds, purposefully misrepresent information in their offering documents, or steal the money.”

In the release, it is noted that until recently, investing in private companies has been available to accredited investors, —  having a net worth of higher than $1 million, or earned income exceeding $200,000 — leaving a large amount of potential investors on the sidelines.

AXA XL is reportedly the second largest insurer in Europe, also providing risk management and reinsurance services to insurance companies globally. In 2018, the company’s net profit was reportedly 2.14 billion euro ($2.42 billion), having fallen by 66 percent from a year earlier. At the same time, the company’s earnings in 2018 rose by three percent, with dividends up by six percent to 1.34 euro ($1.52) per share.

Back in 2015, AXA XL revealed its plans to use Bitcoin (BTC) for remittances in order to streamline payments around the world. At the time, the company stated that many use cases related to Bitcoin had not yet been explored.

As Cointelegraph reported in February, blockchain security firm and crypto wallet service BitGo announced plans to offer crypto insurance through Lloyd’s of London. BitGo Business Wallet clients will purportedly be able to acquire insurance for their digital assets held on BitGo’s Business Wallet service and Custodial offering.

Additional reporting by Adrian Zmudzinski

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Crypto Payments Firm Circle Closes Acquisition of Crowdfunding Platform SeedInvest

Circle announced that it closed the acquisition of the joint crowdfunding platform and registered operator of a broker-dealer.

Goldman Sachs-backed cryptocurrency finance firm Circle announced that it closed the acquisition of SeedInvest, a crowdfunding platform and registered operator of a broker-dealer. The news was reported via a post on Coinbase’s official blog published March 4.

Cointelegraph first reported about the ongoing acquisition in October last year, noting that the deal will enable Circle to expand SeedInvest’s offerings to support cryptocurrencies, including fiat stablecoins and issuing and offering tokenized securities. At the time, the acquisition was put on hold until the United States Financial Industry Regulatory Authority (FINRA) approved the deal.

According to the announcement, the acquisition concluded after Circle obtained regulatory approval by the FINRA, closing the acquisition. The acquired company will reportedly continue to operate normally and will allow Circle to further explore asset tokenization.

According to stats reported on its website, SeedInvest has successfully funded over 220 companies and counts over 260,000 users; the total investment made via SeedInvest reportedly amounts to over $115 million.

Meanwhile, according to an unconfirmed report, Circle itself is also looking to raise $250 million of funding in a combination of equity and debt.

A recent acquisition by cryptocurrency exchange Coinbase spurred controversy after news broke that the acquired digital intelligence firm Neutrino was associated with Hacking Team, which allegedly sold tracking software to authoritarian regimes.

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European Parliament Members, Blockchain Experts Meet to Discuss ICO Regulation

Members of the European Parliament along with blockchain experts met Tuesday, September 4, to discuss possible regulations for Initial Coin Offerings (ICO).

At the recent EU event entitled “Regulating ICOs — Is the Crowdfunding Proposal what we were looking for?” the attendees examined the potential complications currently arising in the ICO industry.

Ashley Fox, a British Member of the European Parliament, pinpointed three main issues to consider at the meeting: challenges faced by ICOs in raising capital, the existing regulatory approaches on the matter, and the future perspectives of the industry.

In his testimony, Peter Kerstens, chairman of the the European Commission’s Taskforce on Fintech, pointed at the “dramatic increase” of ICOs’ volumes in 2018, despite the increasing number of reports on fraudulent ICO projects. According to Kerstens, the growing figures mean that ICOs are “very interesting and promising vehicle instruments” for raising capital.

Kerstens stressed the fact that while the ICO industry faces mainly similar problems with other traditional funding activities, it is still different in terms of the amount of money that can be raised. As a major benefit, Kerstens stressed that while it is “extremely hard to raise millions of euros for a startup,” it is “not that hard” for an ICO project.

Addressing the issue of the main differences between ICOs and crowdfunding, Kerstens stressed the fact that ICO tokens are not “intermediated,” which means there is no third party between issuers and investors, posing the main subject of concern.

According to Kerstens, most of the aspects of ICOs “cannot be covered by crowdfunding proposals” due to the multiple differences between the industries as well as the uncertain status of ICOs as financial instruments, among other reasons.

Turning to the question of ICO regulation, Aeternity’s global communications expert Julio Alejandro has provided a “very original contribution,” claiming that there is no way to stop an ICO project from creation except by banning crypto exchanges.

Alejandro claimed that “you can complain, you can cry, you can believe,” but “the only way that you can actually stop an ICO from creation is stopping an exchange,” adding:

“Whenever you want to stop the diffusion and relocation of information, how are you gonna stop it? Are you gonna ban USBs, the computers? What exact are you gonna ban? You’re banning knowledge.”

Alejandro then stressed the benefits of the ICO industry that are highly valued by the crypto community, such as an ICO’s anonymity, borderless character, mutual transparency, and ability to operate without an intermediary.

Alejandro further stated that if any centralized organization “tries to regulate ICOs in some sense,” the industry would become “obsolete” from its technical perspective.

On September 7, economic and financial affairs ministers from the EU’s 28 member states are set to hold a meeting on the challenges posed by digital assets and the possibility of tightening regulations. The event, scheduled to take place in Vienna, Austria, will discuss the main issues around crypto, such as tax evasion, terrorist financing, and money laundering.

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Crowdfunding Firm Indiegogo to Sell Real Estate-Backed Security Tokens

The international crowdfunding firm Indiegogo will promote a new real-estate-backed token, according to a post on the company’s website.

The asset-backed cryptocurrency will enable accredited investors to buy shares of the St. Regis Aspen hotel in the form of digital tokens. According a report from The Verge, the upcoming digital token Aspen Coin is registered with the U.S. Securities and Exchange Commission (SEC), and will be available for purchase with U.S. dollars, as well as major cryptocurrencies Bitcoin (BTC) and Ethereum (ETH).

The crypto-based crowdfunding project aims to raise $12 million of investment for the St. Regis Aspen hotel, and is reportedly set to be launched tomorrow, August 24.

In December 2017, San Francisco-based Indiegogo announced the launch of the first Initial Coin Offering (ICO) pre-sale in partnership with equity crowdfunding website MicroVentures.

In the announcement, the company says that it partnered with Financial Industry Regulatory Authority (FINRA)-registered broker-dealer MicroVentures in order to ensure offerings are SEC-compliant.

As The Verge reports, co-founder of Indiegogo Slava Rubin said that cryptocurrencies and security-backed coins are “two very different things.” He also emphasized that asset-backed tokens are “less speculative and they’re likely to pan out in the future.”

Founded in 2008, the crowdfunding website Indiegogo is reportedly one of the first platforms to offer crowdfunding, allowing the public to invest and solicit funds for ideas, charities, or startups by charging a 5 percent fee on contributions. In 2016, the firm launched Equity Crowdfunding in 2016, which enabled “anyone to invest and actually own a piece of their favorite startups.”

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Goodbye Kickstarter? The Blockchain-based Project Aims to Challenge the Crowdfunding Sector

A new Ethereum Blockchain based platform called Acorn seeks to create an open, global community and marketplace for crowdfunding- opening it up to new participants such as those living in developing countries.

By incorporating P2P smart contract based governance, Acorn plans to supersede the current roster of crowdfunding platforms, and offer a service which will overcome geographic, political and economic borders. It also intends to mitigate any issues that may otherwise arise from cross-national jurisdiction and litigation.

According to the project’s team, use of the decentralized Blockchain for transaction verification/storage and a proprietary token currency (Acorn, ‘OAK’) means that “Acorn can bypass local taxation that would otherwise apply.”

“By funding through an ICO, and utilizing the Ethereum Blockchain, the Acorn Collective will eradicate the traditional three to five percent transaction fees and five percent platforms fees normally associated with other crowdfunding platforms, such as Kickstarter and Indiegogo,” the Acorn white paper states.

Acorn Hub thus incorporates all aspects of the platform’s crowdfunding infrastructure. However, the coin economy promises to deliver a handful of significant and related essential services. The Acorn marketplace for post funding product sales, without fees is one of them. Other services include marketing support and POS payments app allowing OAK transactions via smartphone.

When crowdfunding doesn’t fund the crowd

The crowdfunding phenomenon has had a huge impact on consumer-based industries in the past decade with its first generation of platforms pioneered by organizations such as Kickstarter and Indiegogo.

Starting as a purely community-oriented platform which reduced the barriers to entry (to concepts such as financial investment sourcing for the creation of original projects); the success of crowdfunding is such that it has even attracted the interest of multinational corporations.

Rather than directly relying on the “crowdsourced” income, these companies often use crowdfunding as a means of assessing public interest and potential sales of new products,  as well as a pitching tool towards the acquisition of traditional forms of investment, such as venture capital.

The growing popularity of this platform and the power with which the existing (centralized) market leaders hold has correlated with high fees, which are applied on top of any local taxes that may apply to you. Currently, individuals and SMEs are competing for funding with Industry veterans, which makes the extortionate fees a disproportionate barrier to entry for candidates with less funding and partnership to begin with.

These platforms have been hailed for the significant role they have played in lowering the barrier to entry for talented entrepreneurs seeking business funding to who may otherwise lack finance or partnerships.

Despite this, there are still many more barriers that exist, not only to existing users due to the basic fees and tax structure, but the millions who live in states and cities which the current market leaders cater to. The Acorn project could break down the borders in the crowdfunding sector.

ICO pre-sale

Acorn’s ICO pre-sale has been officially announced for launch on Monday Jan. 29 and will have been running through to Friday Feb. 19.  

The Public ICO will be a true test of public interest, and an example of crowdfunding the concept of crowdfunding itself; rather than other traditional forms of investment.

Daniel Mitchell

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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A New Decentralized Platform Helps Investors Enter the Over-the-Counter Ecosystem

Despite its growth in the level of awareness, how to enter the crypto ecosystem still remains a mystery to a lot of interested participants. Most people do not understand how to or where to find entry into a market that is filled with so many opportunities.

To this end, OnPlace, Russian-US-based company, is creating a decentralized investor community for customers to join, allowing for closed Over-the-counter (OCT) assets to be introduced to the market turnover and to create liquidity for them as well. The platform will create opportunities for investing into funds of the fastest growing tech companies around the world with low entry thresholds for the average person to access.

The nature of the crypto marketplace at the moment consists of independent assets scattered over numerous exchanges and platforms. For investors who are new in the industry, this arrangement can be quite disorientating. Having to jump between platforms in order to achieve ownership of tokens and crypto assets entails a cumbersome and sometimes discouraging situation. Therefore, having all processes harmonized on a particular platform that gives investors all the necessary options at a glance is indeed a welcome industrial development.

Unified investment platform

The OnPlace Private Assets Tokenization System (PATS) protocol is designed to tokenize over-the-counter (OTC) assets for customers to invest into. The protocol entails multiple steps firstly establishing a marketplace opportunity window (MOW), following the MOW there is a selection of projects to be tokenized based on the criteria and communal discussions of crypto-investors.

This system will allow the community of investors to make decisions in a decentralized manner in regards to the further distribution and motion of tokenized assets. The use of the protocol will mean that each decision in connection to transactions over tokens will be recorded in a network with its own Blockchain and will not be subject to change.

Letting investors have control

Every underlying asset implemented using PATS protocol will be represented by a separate private token and endowed logic of decentralized management of PATS protocol. This approach is based on the idea of creating a Decentralized Autonomous Organization, in which each holder of a token can directly affect the asset and determine further operations over tokens via voting.

Thus, each decision in regards to operating over tokens will be registered in a network and will not be subject to change. Together with the managing and monitoring functions, PATS protocol provides autonomous safety of investors’ balances from losing funds during the emission and closing of shares.

This setup by OnPlace is expected to solve one of the persistent problems that have hindered the mainstream adoption of cryptocurrencies. The solution that this project brings will allow investors to determine the closing date of an asset, add new assets for examination inside the community, vote for the emission of tokens of underlying assets or change the parameters of circulating tokens and produce equivalent trade of tokens of the PATS protocol directly, without using third-party stock exchanges.

This system enables the attributes of Blockchain technology by allowing investors significant control over the handling of assets that they trade.

Crowdfunding and token sale

Following its creation in 2016 OnPlace now has existing corporate existence in Moscow and the US, with a self-funded bank account of $200,000. Having established a team that developed an alpha version of their Ethereum Blockchain Contracts, launching a closed alpha for early investors, the company has attracted over $1 mln with their first wave of investors from a crowdfunding platform.

OnPlace is prepared to launch a TGE (Pre-Sale) in February 2018, providing customers with an easy way to invest into a number of companies from IT-related industries using business standards and cryptocurrency expertise.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Kickstarter ICO? Don't Count On It Says Crowdfunding Leader

The company most widely associated with crowdfunding, Brooklyn-based Kickstarter, has no plans to get into the initial coin offering (ICO) business.

Coming in response to the news yesterday that competitor Indiegogo would facilitate ICOs on its platform, supporting entrepreneurial efforts in this new area of fundraising, a Kickstarter spokesperson told CoinDesk that the firm isn’t looking to follow this lead.

“The answer is 100 percent a very firm no,” a company spokesperson said.

Since launching in 2009, Kickstarter has been used to successfully distribute $3.04 billion to creative projects, according to its self-reported statistics. It first crossed the billion-dollar mark in 2014. Total ICO funding so far is at $3.8 billion, according to CoinDesk’s ICO tracker.

Kickstarter offered few details as to the reasoning for the decision, ultimately directing CoinDesk to its charter, which has five planks.

The first reads, “Kickstarter’s mission is to help bring creative projects to life” and the fourth says, “Kickstarter is committed to the arts.” In 2015, the company insulated itself from pressure to make profits its sole priority by reincorporating as a public benefit corporation (PBC).

PBCs are a relatively new legal entity that protects companies that want to pursue a social mission as well as fulfilling their fiduciary responsibility to shareholders. We previously reported on Blockstack, which also reincorporated as a PBC.

In this way, shareholders in Kickstarter earn an income stream rather than hoping for a giant return on a big exit down the road. (The company has long committed to remaining private, and one of its three co-founders has compared a share in the company to owning the rights to a popular song.)

But despite any similarities, the company said this unique structure protects it from the temptation to leverage its brand for returns in the frothy ICO market.

“Not something we looked into or will look into,” the spokesperson said.

Kickstarter website photo via Shutterstock.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.