What will happen with digital assets in 2020? Will it be the year that regulatory restrictions fall away and tokenization really gets going? Will we see a healthy secondary market for digital securities? Will the supply create demand or vice versa?
Event to start the crucial discussion that will help shape the future
Come help us figure it out! SolidBlock, an asset-backed security issuance and trading platform, along with Women in Block, are hosting DigiFinex cofounder Kiana Shek along with industry leaders, such as On Yavin from Cointelligence, joining us virtually and in person to answer all those questions and more. We’ll look back at how far we’ve come and make predictions about where digital assets are going in 2020. The event’s festivities include free beer, sponsored by Tezos Israel.
The event is taking place at WeWork Labs, Menachem begin 144, Midtown, 34 fl, Tel Aviv. We have an awesome lineup of speakers tonight, from Kiana Shek of Digifinex to Wojtek Kaszycki of ADAX, Harish D.Gupta of Polybird, On Yavin of Cointelligence and Ramy Yarden of Everflow.
Regulation vs. the rest of us
Some thoughts ahead of the event to set the tone of the conversation:
Most experts would agree that the main obstacle holding both the primary and the secondary market back is regulation. Right now in the U.S., regulation surrounding blockchain and crypto is about as clear as pea soup. And that’s costing the U.S. its reputation as a world economic leader while more nimble nations take advantage of the fog of regulatory uncertainty created by confusion the SEC has sown.
The best minds in the U.S. seem completely unable to make up their minds when it comes to digital assets. Should they be considered a security, like stocks or bonds? Are they a non-security investment, like bank accounts or precious metals? Or something else entirely, a class of their own?
Even the geniuses at Harvard Business School can’t figure it out: they admit they’re “perplexed” by what they call the Hinman Paradox, named for the head of the SEC’s Corporate Finance Division, who has argued that some tokens start out as securities and then evolve into something else.
Frankly, if Harvard can’t figure it out, is there hope for the rest of us.
The BCoT Decision
As proof of how far the confusion has spread, New York startup Blockchain of Things (BCoT) recently settled with the SEC, paying a $250,000 civil penalty for failing to register its ICO as a security.
But here’s the thing: BCoT hired multiple law firms and numerous legal advisors during their ICO. They honestly believed that they were complying with all relevant securities laws. None of which made a dent in the SEC’s argument. BCoT now has to participate in a “voluntary” refund scheme for any investor requesting a refund, a hit that could tally up to $13 million before the day is done.
For any startup business, this is unquestionably a disaster. But more alarming is the climate of fear and confusion around crypto that this and other recent SEC decisions have created.
It’s not just ICOs that are affected. While savvy investors may realize there’s a world of difference between an ICO and a security token offering (STO), many paint both with the same “crypto” brush. Meaning that when ICOs are threatened, regulators and investors are also wary when it comes to STOs.
Yet look how crucial that difference is.
While an ICO is selling a coin whose value can be difficult to pin down in absolute terms, an STO is selling tokens which are tied to a real-world asset. This asset can be anything, from a painting or vintage car to a pharmaceutical patent. But the greatest promise for STOs lies in real estate. Because the value of real estate assets is fairly easy to determine, and algorithms are already in place for doing so, tokenizing real estate creates a token with a clear and easily-defined value. Tokenization also addresses some of the weaknesses of the first two crypto waves – creating the third wave of crypto that we’ve all been waiting for.
Digital Assets – does the world need them?
Let’s go back to the basics and discuss who needs digital assets. Is liquidity seen in a positive light or does it interfere with the business models of various stakeholders within industries such as real estate, alternative energy and the rest? What are the real challenges that digital assets are solving? We all need to go back to the basics. Yes, Bitcoin gave us a great gift of blockchain that has so far been successfully used to transfer money and assets across borders as well as in a few other successful use cases. But the most important question the answer to which we will see in 2020 – will tokenization really hold water? Will exchanges continue to make money? Will they add real world assets to their cryptoasset offerings.
Come to the event to find out! To RSVP, click through to save your spot for Trading Digital Assets in 2020 now!