Bermuda Is Now Accepting USDC Stablecoin As Payment for Taxes, Fees, and Government Services

Bermuda’s residents can now pay their taxes in cryptocurrency. The government of the British Overseas Territory announced on October 16 that it will take payments in Circle’s USD Coin (USDC) “for taxes, fees and other government services.” 

According to a press release by Circle Internet Financial, Bermuda will support USDC as an acceptable form of tax payment for the territory’s 60,000 residents.

USDC is a stablecoin pegged 1-to-1 with the US dollar. It was introduced a year ago by San Francisco-based digital asset exchange Coinbase and Circle. More than $1 billion in USDC has been issued between the two companies.

This will be the first time that a sovereign nation will be accepting a blockchain-based stablecoin for tax payment.

Support for various other “decentralized finance protocols and services” are also being considered as part of a larger project to integrate digital currencies into official government operations, the release noted.

Bermuda also revealed on Wednesday that it will be partnering with blockchain firm Shyft Network to develop a digital identity program, which would help individuals and businesses based in the country.

Commenting on Bermuda’s plan for encouraging USDC adoption, Circle CEO Jeremy Allaire remarked:

“Bermuda is focused on enabling financial services to be built and delivered using cryptocurrency and digital assets.”

The Bermuda government established a blockchain task force with the help of the Bermuda Business Development Agency (BDA) in 2017. The nation’s authorities also passed legislation on initial coin offerings (ICOs) and launched a regulatory sandbox for digital currencies.

In July 2019, Circle shifted its operations from the US to Bermuda due to the nation’s crypto-friendly business environment.

In November 2018, Ohio became the first US state to accept Bitcoin as payment for taxes. However, a subsequent political administration recently decided not to move forward with the Bitcoin tax policy due to potential conflicts with state law.

Other world governments including the Republic of the Marshall Islands and the People’s Republic of China are reportedly developing their own state-backed digital currencies.

Circle’s management noted:

“Governments everywhere will need to respond to this fundamental innovation. Hats off to [Bermuda] Premier David Burt, who continues to show more leadership on these issues and very much remains out ahead of other governments in the world.”

Safe Haven: Yuan Dives and Bitcoin Rises

Bitcoin is moving higher, once again, as the trade war between the US and China escalates.

Yesterday, the Yuan dropped below 7 to the dollar with the People’s Bank of China (PBOC) blaming the decline “to unilateral trade protectionism, as well as expectations of more tariffs on China”.

The PBOC said they have “the experience, confidence and ability to keep the yuan exchange rate basically stable at a reasonable equilibrium level,” according to a report in SCMP.

Of course, it is unknown as to what the equilibrium level is expected to be. The retaliatory move by China encouraged President Trump to quicly label China a currency manipulator.

Meanwhile, Bitcoin increased to over $11,700. Some of this increase may be Yuan holders moving money to Bitcoin to hedge the deprecation of yuan. While it is explicitly stated that crypto trading is prohibited in China, a robust OTC market has evolved and Bitcoin trading remains active in China.

Jeremy Allaire, CEO of Circle – a crypto ecosystem, joined CNBC this AM to provide his insight on the “surge” in Bitcoin price.

Allaire said that crypto and Bitcoin specifically is participating in these global macro forces. The volatility of traditional markets drives interest in a “non-sovereign” store of value such as Bitcoin. “It looks like it will continue,” said Allaire.

Allaire notes there are many exchanges with their legal venue outside of China but still operating in places like Beijing and Hong Kong. China also remains a major crypto mining center.

“There is a lot of national Chinese participation in this market,” affirmed Allaire.

He also believes there has been a political softening in Chinese policy towards crypto. Indications such as the Bank of China starting to market information on Bitcoin and a recent court case declaring Bitcoin as property helpt to legitimize the digital currency.

As stocks tumble, Bitcoin starts to look better due to is non-correlation.

So can we expect more appreciation in the price of Bitcoin as the trade war escalates? It is starting to look that way.

Circle CEO Jeremy Allaire explains the overnight surge in Bitcoin from CNBC.

Senate Hearing on Blockchain & Crypto: Still Questions but Less Hostility (as No Facebook Presence)

The US Senate Banking Committee held a hearing today entitled Examining Regulatory Frameworks for Digital Currencies and Blockchain. The Hearing is part of an ongoing process of education and understanding regarding the emerging digital asset ecosystem and the technology that supports it.

Earlier this month, both the House and the Senate held hearings on Facebook’s announced crypto Libra. David Marcus, Facebooks lead on Libra and the Calibra wallet, took a bit of a beating in both chambers of Congress. While Marcus came across as somewhat ill-prepared and evasive, the witnesses at today’s hearing were more clear-cut in their opinions.

Banking Committee Chair, Senator Mike Crapo, opened up the hearing stating that digital technology innovations are inevitable. These innovations could be beneficial:

“I believe that the U.S. should lead in developing these innovations and what the rules of the road should be,” said Crapo.

The Senator expressed his intent to better understand how the technology operates and how blockchain may better serve consumers.

“I look forward to learning more about: the encryption and networking features behind blockchain technology and how that technology enables digital currency transactions; ways that the market for digital currencies has grown and evolved over the last decade; different types of digital currencies in the marketplace, including their key differences with Facebook’s proposed digital currency,” said Senator Crapo, seeking to ascertain the balance between innovation and appropriate regulation.

Senator Sherrod Brown, Ranking Member on the Committee, was more skeptical. Brown hammered Facebook in the prior hearing and he revisited similar themes in his opening statement.

Senator Brown claimed that big tech and big banks are “hiding behind innovation.” Brown drew a parallel to a previous innovation, sub-prime mortgages, which helped to slam the economy into recession:

“Just like Facebook – which claims its new currency will help the unbanked and underbanked – these mortgages were supposed to help people who never had access to credit achieve the American dream of homeownership,” Senator Brown stated. “In reality, those mortgages ripped off millions of families who ended up losing their homes, they wrecked the economy, and they made the staggering inequality in this country even worse.”

Brown readily acknowledged the shortcomings in the current banking and payments system, but the Senator questions as to whether the private sector is the solution.

”… some infrastructure works better as a public good, and we shouldn’t let Big Banks or Big Tech get their hands on it,” said Brown. “The Federal Reserve and other watchdogs need to continue to be leaders in banking innovation. And if we don’t move quickly to improve important infrastructure – not just roads and bridges, and highways and water sewer systems, but our payments systems, too. If we don’t move quickly to improve it, we’ll end up with big corporations that have broken our trust again and again and again, and frankly, I don’t think that makes any sense.”

Jeremy Allaire, CEO and co-founder of Circle who was present on behalf of the Blockchain Association, opened up the discussion with a prepared statement emphasizing regulatory compliance. Far better prepared than Marcus at the Facebook hearing, Allaire explained they want regulation and consumer data protection. His industry is simply seeking greater clarity in regulation.

Allaire turned the tables a bit noting that the traditional financial system is peppered with money laundering and criminal activity. Something which could be better managed using blockchain tech.

“Our existing financial system is built on legacy technology that is riddled with privacy violations and data breaches,” said Allaire. These are words for the moment as Capital One has just announced an enormous data breach where 100 million users saw their information pilfered.

Professor Mehrsa Baradaran of the University of California, Irvine School of Law, targeted the profound shortcomings of the existing financial system:

“Banks have abandoned certain low-profit communities and customers, ” said Prof. Baradaran. In the US, there are too many “banking deserts” forcing low-income people to depend on check cashing services and payday loans. These services gouge users and tax a segment of the population which can ill afford the added cost.

But Prof. Baradaran is of the opinion that the Federal banking system must be reformed. Same-day or real-time payment capabilities already exist, so why not make it available for the retail market? Do we really need a Libra?

“The Federal Reserve should open up the payment system to individuals. Blockchain is not the best path,” according to the Professor.

“Our failure to move forward with a real-time payments system is costing consumers billions of dollars,” added Senator Van Hollen.

Many of the questions addressed the Facebook/Libra enigma which colored much of the discussion. Facebook, in some respects, has undermined the entire industry as the focus has shifted from enabling innovation to stymieing data abuses and malfeasant operations. Facebook’s brash attempt at creating a self-sovereign global currency has become a crypto trap.

Yet, even in the shadow of Facebook’s ill-fated stablecoin dreams, Senator Mark Warner believes that blockchain, or distributed ledger technology, has “great potential.”

Perhaps the most encouraging portion of the Senate Hearing for the crypto advocates was the discussion on advancements in other competing jurisdictions.

Dr. Rebecca M. Nelson, a Specialist in International Trade and Finance at the Congressional Research Service (CRS), said there is a patchwork of national regulations in a sector that is “global in nature but regulated at the national level.”

Some countries are striving to become crypto hubs. Others have banned or restricted the utilization of crypto, said Dr. Nelson.

“Other jurisdictions are out ahead of the US,” said Dr. Nelson. “Yes, they [blockchain innovators] are leaving [the US].”

Dr. Nelson believes that blockchain innovators are exiting the US not to avoid regulation but due to the lack of applicability in domestic rules. These companies are not trying to shirk regulation but it is hard to argue with a need for clarity of law.

Allaire commented on Circle’s recent decision to operate a portion of their business in Bermuda:

“As we looked at our expansion internationally … there are opportunities outside the US that are larger. We looked at all of the jurisdictions… We wanted a high bar from a regulatory perspective.”

Allaire wants to operate in a jurisdiction where fundamental risks are being supervised, including custody risk.

“In the US, there is an incredibly gray area which makes it difficult to operate.”

So who should regulate crypto? Asked Senator Brown. Well, that depends. If it is a security, or a commodity, existing regulators clearly have oversight. But if a different type of digital asset or service emerges? Well, that’s not quite as clear, hence the question.

Senator Jon Tester said this is coming and they need to be ready for it adding that he doesn’t think they are going to leave blockchain tech and digital asset oversight entirely up to regulators – perhaps foreshadowing forthcoming legislation.

Senate Banking Committee Schedules Hearing on Digital Currencies, Blockchain & Regulation: CEO of Circle Jeremy Allaire to Testify

Next Tuesday, the US Senate Committee on Banking will hold its next crypto-focused hearing. Earlier this month, the same Committee held a hearing on Facebook’s proposed stablecoin, Libra. The Committee struggled with the concept largely due to the lack of trust regarding Facebook’s profound abuse of user data.

This forthcoming hearing, entitled, “Examining Regulatory Frameworks for Digital Currencies and Blockchain,” may take on a different tone. Many elected officials in Congress are keen on supporting Fintech innovation and blockchain technology is currently a hot area of entrepreneurship in the US and around the world.

The hearing will involve Jeremy Allaire, co-founder and CEO of Circle – a leading US based crypto ecosystem. Allaire, speaking on behalf of Circle as well as the Blockchain Association, has long lamented the state of regulation in the US regarding distributed ledger technology. Much of the debate regarding crypto hovers around when a digital asset is considered a security and when it is something else (and thus regulated differently). Many domestic projects have moved offshore to launch their projects in light of the strict definition whereby most all digital assets are considered to be securities.

The entire witness list is as follows:

  • Jeremy Allaire, Co-Founder, Chairman and Chief Executive Officer, Circle, on behalf of The Blockchain Association
  • Rebecca M. Nelson, Specialist in International Trade and Finance, Congressional Research Service
  • Mehrsa Baradaran, Professor of Law, University of California, Irvine School of Law.

The proceedings may indicate the leanings of the Senate regarding any possible legislation which may alter the regulatory environment for crypto firms. The Blockchain Association has been working hard to advance policy deemed vital to the sector of Fintech and thus the Hearing should be very informative.

All Senate hearings are live-streamed. This hearing will be available on the Senate Banking Committee’s website.


Circle Fires 30 Employees Due to “Restrictive Regulatory Climate in the US”

Digital asset firm Circle has let go 10% of its workforce or 30 individual employees. Circle founder and CEO Jeremy Allaire explained the move in a series of tweets.

Allaire said:

“We made these changes in response to new market conditions, most importantly, an increasingly restrictive regulatory climate in the United States.”

Simultaneously, Allaire said they will continue to press forward to encourage a more “balanced crypto policy” in the United States.

Yesterday, Allaire took to Circle’s blog to lament and lambast the regulatory environment in the US. Effectively, in the US every crypto is a security or, perhaps a digital currency such as Bitcoin or Ethereum. Circle and Allaire hope to see a policy and regulatory environment to evolve that recognizes some digital assets as just a utility – or potentially holding characteristics of a utility, as well as a security, and maybe even a currency.

Allaire is not alone in his frustration. Some crypto insiders see the Securities and Exchange Commission (SEC) as stifling blockchain development.

Meanwhile, other global jurisdictions push forward with the technology recognizing that crypto and distributed ledger technology remains a work in progress. Yet it is this same risk that enables an entrepreneurial and innovative ecosystem to thrive.

Somewhat ironically, France has taken a leadership position in crypto regulation enacting a new law to better manage digital assets. Proposed in 2018, the Loi Pacte will become actionable in June – allowing utility tokens to be issued and traded – while not being considered a security. France is encouraging the European Commission to take a similar approach – possibly expanding the regulation across the European Union.

While legislation has been pitched on Capitol Hill to craft bespoke regulation it remains mired in the political process.

In the meantime, some cryptopreneurs are simply moving offshore, or perhaps applying for a crypto visa in France.

Circle CEO Jeremy Allaire Pleads Case for US Policy Change Regarding Crypto

Jeremy Allaire, CEO and founder of digital asset firm Circle, took to the pages of the site’s blog to lament the state of regulation in the US when it comes to crypto.

Allaire said his post was driven in part to their decision to “geofence,” read block US investors, on crypto exchange Poloniex. He said he was “deeply frustrated” by the action but said it was due to regulators taking a sweeping view of what is considered to be a security – IE anything that is tradable online.

Allaire is of the opinion that “regulation has failed to keep up” when managing blockchain innovation, and he is taking the fight directly to Congress:

“We believe that digital assets represent a fundamental(ly) new class of financial instrument that defies simple classification as security, commodity, or currency. Many digital assets occupy one, two, or all three depending on their context and use. Innovative technologies deserve new regulatory frameworks, and we will continue to advocate for change. But without Congressional action, the Securities and Exchange Commission is forced to rely on 85-year-old laws and 73-year-old court cases to develop guidance about which digital assets might be considered securities. These laws are inadequate to address crypto—which doesn’t easily fall into established categories—and as a result the SEC guidance isn’t easy or straightforward to interpret.”

And that pretty much sums things up. Crypto entrepreneurs are currently doomed to regulation defined by the 1930s. The SEC is not inclined to do anything other than enforce existing securities law – perhaps more broadly than it was originally intended.

Regarding the recent SEC guidance, Allaire said it created “more questions than answers,” echoing the sentiment from other industry participants.

“We don’t want the US to get left behind and won’t sit by, quietly, while innovators are driven out of the country,” said Allaire.

There have been multiple reports of issuers offshoring offerings to evade a perceived regulatory trap in the US. France, a country that is hoping to become a center of blockchain innovation, has just passed a law to enable the issuance of utility coins – that may freely trade. Inquiries into their crypto visa program are said to be increasing.

France is attempting to convince the European Commission to follow in their footsteps as well.

While the US may have deep private capital markets and a robust entrepreneurial culture, success can breed complacency when it comes to shouldering risk – perhaps most tellingly when it comes to regulatory change, innovation, and fostering competition.

So what comes next?

It is clear now that for digital assets to be considered anything other than a security, Congress will need to act. And that is a Herculean task. While some members of Congress are interested, the gears of policy grind slowly forward. Sometimes halting. Sometimes going into reverse. It will take voices like Allaire’s, and many others, to move things forward. Either that or some empirical success from a competing nation that shames policymakers forward.

Big News: Leading Crowdfunding Platform SeedInvest Receives ATS Approval From FINRA, will Add Secondary Trading for Private Securities

SeedInvest, one of the leading US-based investment crowdfunding platforms, has received regulatory approval from FINRA to operate a secondary marketplace for securities via an alternative trading system (ATS). SeedInvest is the first traditional crowdfunding platform to receive an ATS license.

Providing liquidity for private securities in a regulated marketplace is on the list of just about every online capital formation platform. The SeedInvest news is significant for the platform as well as the industry. SeedInvest was already a registered Broker-Dealer, a requirement to receive an ATS license.

Ryan Feit, co-founder and CEO of SeedInvest, commented on the announcement:

“Liquidity remains a key missing piece towards democratizing the private capital markets. Creating a truly vibrant secondary market for private company shares has the potential to make startup investing a significantly more attractive asset class.”

Feit, in a recent interview, foreshadowed the announcement stating his ambition to launch a secondary marketplace for securities issued on their platform. Currently, SeedInvest issues securities using the full stack of exemptions including Reg A+, Reg CF and Reg D. Notably, under Reg A+, the security may trade immediately following its issuance.

Feit also mentioned his ambition to raise capital for issuers globally while accepting investors from around the world. SeedInvest has already raised capital for issuers based outside the US.

SeedInvest reports over 250,000 registered investors with approximately 50,000 of those individuals being accredited. SeedInvest also integrates with established VC firms and angel investors who participate in some of their offerings. SeedInvest is a highly selective crowdfunding platform and only accepts a small fraction of issuers who apply to raise capital on their platform.

By launching an ATS, SeedInvest will take an important next step in providing liquidity to traditionally ill-liquid securities which historically have depended on an acquisition or initial public offering to provide an exit opportunity for early investors.

SeedInvest, which was acquired by crypto-centric firm Circle last year, added that gaining the ATS license was part of “realizing Circle’s longer-term vision.”

Jeremy Allaire, co-founder and CEO of Circle, said they are empowering individuals to create and share value in ways the are more inclusive, open and efficient.

“ATS approval for SeedInvest sets us on a path to develop secondary trading marketplaces and to facilitate liquidity for private securities, which together hold the promise of significantly democratizing private capital markets,” said Allaire.

SeedInvest did not announce the launch date of the secondary marketplace but expectations are for the trading venue to go live at some point in 2019.

The most recent list of approved ATSs, minus SeedInvest, is available here.

At IMF Spring Meetings, JP Morgan Rep Says JPM Coin Could Streamline KYC/AML

The IMF’s Christine Lagarde hosted a panel discussion on “Payments in the Digital Age” at the IMF’s Spring Meetings held this week in Washington, DC.

A video of the panel is provided by CNBC international TV and can be viewed here.

Panelists included the ECB’s Benoît Cœuré, the Central Bank of Kenya’s Patrick Njoroge, Circle’s Jeremy Allaire and JPMorgan Chase’s Sarah Youngwood, who spoke on her bank’s recent creation of a wholesale digital currency called JPM Coin.

Youngwood said JP Morgan is aiming to compete with Venmo, through “a consortium of  banks…(that is) in fact…twice as big as Venmo,” aims to provide secure P2P payments, where there is, “…still a pain point (with KYC/AML)…making sure that the good actor and only the good actors can transact, and so we obviously need to do that, and we support doing it…”

Youngwood said the coin’s distributed ledger could simplify KYC/AML (know your customer/anti-money laundering) procedures required for banks to permit transactions:

“We absolutely need to have a more efficient way to have the information move. So again we went to technology and the distributed ledger is actually a great technology for that because we can put information on the ledger so we can clear that this is a good actor and this is a good transaction immediately instead of through phone calls and email, the old way (with) the correspondent banks…internationally.”

Currently, said Youngwood, “we have the information network…from the movement of the currency on SWIFT which is already working…we are also working with this innovation with JPM Coin where we say if we do them together, backed by US dollars, on the ledger, would that make sense.

JPM coin is being implemented, “…in addition to scale solutions that are already working in hundreds of billions of dollars,” she said.

Lagarde asked if data used to validate customers is stored.

Youngwood said this is being done using a tokenized identity solution in partnership with the banks that are filling in the information and, presumably, conducting primary KYC/AML procedures:

“Once you store it once…the information sits in the ledger in this very secure way…it’s that tokenized information that sits in the ledger that actually works…”

She said that the “information topic” of actor/ transaction validity is solved by token-based identity information stored on chain, and that this “opens up many more transactions.”

Lagarde asked if JP Morgan is concerned about competition, and Youngwood said the current very large scale of JP Morgan’s “working” payments business is reassuring and that the company, “welcome(s) competition as long as the activities of the competitors gets regulated and as long as it is solving customer issues…”

Report: Steeply Discounted Circle Shares for Sale on SharesPost

Private shares for “global crypto finance company” Circle that sold in a Series E fundraise last May for $16.23 each are reportedly available for sale on SharesPost now for $3.80, The Block reports.

The May raise put Circle’s valuation at $3.01 billion.

Though The Block says it could not determine how many shares are being sold currently at the discounted price, if the price reflects market, that would place the total value of Circle’s shares at around $705 million.

Circle was recently named as one of Forbes “Fintech 50” companies and was valued in that article at $3 billion.

An unnamed UK-based crypto hedge funder reportedly told The Block that low price on SharesPost may be resulting from a perfect storm of factors:

“[I] reckon it’s a combination of liquidity discount applied to private companies + crypto bear market + Circle getting absolutely killed on write down of acquisitions + bear market volumes.”

Circle acquired the crypto exchange Poloniex in 2018, but trade volumes there and elsewhere are reportedly way down. Notably, Circle acquired prominent US-based investment crowdfunding platform SeedInvest in late 2018 for an undisclosed amount.

Diar has reported that trading on the world’s top crypto exchange, Binance, is currently down 40% since December 2018).

Binance is still reportedly handling $520 million USD per day in crypto trades, but Poloniex handles less than $7 million- about 5 times less than it rival Coinbase, which does a reported $37 million USD per day in crypto trades.

Circle CEOs Jeremy Allaire and Sean Neville, however, recently wrote that business is strong at Circle’s over-the-counter trading desk, Circle Trade, which the founders say handled more than $24 billion in crypto trade volume despite bear market conditions in 2018.

The two also claim to have, “onboarded a record number of new institutional clients…(grown) our trading operations to 24/7 with coverage in the US, Europe and Asia, and added significant workflow improvements, including the launch of our RFQ Electronic API.”

Some commentators reportedly find the discounted Circle share offering baffling given those claims.

According to “an executive at a rival exchange,” news of Circle’s discounted share price:

“Doesn’t make sense at all. They have mentioned staggering volumes growth.”

Another crypto exchange executive added:

“Circle Trade is the biggest profit earner — could be the majority of profits…(but) the OTC space is generally getting more competitive, margins are down.”

Circle could not be reached for comment by press time.

Security Token Launch Event: What’s Going on with Blockchain & Securities

Last week, the Security Token Academy held its second annual STO focused event in Manhattan. This year, attendance at the Security Token Industry Launch event increased dramatically as more financial services players are viewing securities on blockchain as a likely path for the future of investments. Simultaneously, crypto startups don’t want to be left out of the regulated path for issuing securities on blockchain.

While most people in attendance are of the belief that blockchain can streamline the back office operations of securities issuance, while making it easier to securitize assets, many questions remain regarding ICOs and secondary transactions. Digital assets may benefit from a more automated process that reduces intrinsic sector bottlenecks. Technology can take a T + 2 trade to T + a few minutes. Regulation and compliance can be cooked into smart contracts.

For certain asset classes, such as real estate, some advocates envision a far greater universe of what can be securitized, and eventually traded on a digital marketplace, regardless of jurisdiction. While still very early days, visionaries predict a very different landscape in the future of the financial services.

Below are just a few of the comments made by the various speakers during the STO event.

“When we started Circle five and a half years ago we were very excited about cryptocurrencies. We became immediately convinced this would become the foundation as to how the global financial system works.”

“Seedinvest has built a very nice business helping hundreds of businesses to raise capital over the internet … [We are] kind of a made for each other, security tokens and crowdfunding…”

“We see it being a very, very complimentary match to the roader set of things we are doing. We are on the cusp of new forms of capital formation” [commenting on SeedInvest acquisition]

“… a lot of hype and a lot of excitement. It is very justified. The impact is far far greater than any of us anticipate.”

Jeremy Allaire – CEO and founder of Circle

“If you are talking about high frequency trading there is not a blockchain in the world that can handle that…”

Boris Reznikov – Director of Partnerships, Interstellar

“Hedera Hashgraph is not a blockchain topographically. We are really a performant distributed technology … being fast, fair, and secure.”

Rachel Lam – Market Lead, Financial Services, Hedera Hashgraph

“The crypto people are still skeptical of the security token people.”

“We went from 100% of people not knowing what it is to 99% of people not knowing what it is.”

Carlos Domingo – CEO and co-founder, Securitize

“People come to our platform because we have a reputation of getting quality deals that have been vetted.”

Ryan Feit – CEO and co-founder, SeedInvest

“We look at smart contracts as the ultimate structured product. On Monday night we closed on Aspen Digital. Ten days from now you will see us launch a very large fund interest.”

“Regulation first, technology second. That wins the day.”

Vince Molinari  – CEO and co-founder, Templum

“We are blessed with an extraordinary piece of legislation [the JOBS Act of 2012]. People should read it … It’s masked by this whole crypto world that has raised billions. Crypto is going to move towards that legislation.”

“We need to decentralize the SEC.”

Howard Marks – CEO and co-founder, StartEngine

“Everything you described can be programmed into smart contracts. Programability amplifies regulation to where it becomes a smart contract.”

Michael Ovid – co-founder, AirSwap

“I think a lot of jurisdictions outside the US see this as an opportunity to catch up to the US … Things move more slowly here because there is already an established capital services market.”

“We will haver some exciting news to share shortly. ETOs [STOs] will begin in Q4 of this year.”

“This is a major, major revolution that will take years to play out…”

Alex Molé – Investor Relations Manager, Neufund

“What we are trying to do with Neufund, as well as others, is to build upon regulatory structures. Malta is the first country that has regulations …  structure which can go to market. You have regulatory structures that are trying to catch up.”

Cliff Pace – Head of the Fintech Accelerator Program, Malta Stock Exchange

“For those that entered into the ICO [initial coin offering] space and did these offerings that are not really compliant it will be interesting to see how these convert into the market place.”

Yoel Goldfeder –  CEO, VStock Transfer

” … if you are looking to monetize a single asset … it is proven to be very challenging in the public marketplace … tokenization of real estate can provide a way to monetize in a way in private markets that you could not in public markets.”

Jason Myers – Partner, Clifford Chance

“I think you would be surprised at some of the names that are looking to do things here.” [speaking about real estate and tokenization]

Brad Greiwe – co-founder and Managing Partner, Fifth Wall

“Why no active STO [security token offering] exchanges? It will take some time …”

Troy Paredes, founder, Paredes Strategies and former SEC Commissioner

Crypto Firm Circle Acquires Crowdfunding Platform SeedInvest

SeedInvest, one of the leading US based investment crowdfunding platforms, is being acquired by crypto firm Circle.

The news was reported in a blog post by Circle that stated SeedInvest was being acquired as it seeks to enable startups to issue security tokens using blockchain, while providing customers with greater access to invest in cryptocurrencies.

Deal terms were not revealed. The deal will require FINRA approval.

Circle has notably received the backing of Goldman Sachs.

In early 2018, Circle acquired crypto exchange Poloniex.

It has also been reported that Circle is seeking a banking license.

According to Circle, they have signed a definitive agreement to acquire SeedInvest. The acquisition will potentially accelerate their strategy of “delivering a token marketplace that enables businesses and individuals to raise capital and interact with investors using open crypto rails and infrastructure.”

Circle said it aims to “raise the bar for the crypto industry” and is embracing security tokens and the existing regulatory regime.

The acquisition is expected to aid companies to more efficiently raise capital through a regulated platform while providing investors with secondary market to trade digital assets.

“The SeedInvest team brings unique expertise and experience to help drive this vision forward. SeedInvest will add 30 team members to Circle’s New York location, a comprehensive services offering for raising capital, and a long history of working closely with regulators on innovations in private capital formation,” stated Circle.

Speaking to Bloomberg, Circle Chief Executive Officer Jeremy Allaire stated:

“This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital. Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.”