The STO Handbook launched at the FinTech4Good NYC Security Token Forum
[New York, USA, April 12, 2019] - On April 12, 2019, the 2019 New York Security Token Forum (NYSTF2019) was successfully held at Times Square Tower in New York City. Hosted by FinTech4Good in collaboration with Blockchain Economist Show and BlockGlobe, the NYSTF brought together issuance platforms, exchanges, advisory firms, law firms, investors and regulators to discuss issues around the challenges and opportunities associated with the mainstreaming of digital securities.
The NYSTF2019 had prominent speakers including Tim Draper (Founder of Draper Associates, DFJ and the Draper Venture Network), Jeff Bandman (Founder and Principal of Bandman Advisors), Yorke Rhodes III (Cofounder Blockchain at Microsoft & Program Manager Azure Blockchain Engineering – Microsoft) , Vincent Molinari (Co-founder of Templum Inc), Brian Farber (General Counsel at Securitize), Brian Korn (Partner of Manatt, Phelps & Phillips, LLP), Frank Walczak (Director of Business Development of tZERO), Joseph Portelli (Executive Chairman of Malta Stock Exchange), Lewis Cohen (Co-founder of DLXLaw), and many other industrial leaders. A full list of speakers can be found here.
Security Token Offerings (STOs) have emerged as a new and compliant model to raise funds in 2018. However, STOs are still in an early stage and many traditional investors and companies are not well informed of the potential challenges and benefits of security tokens. What is a security token offering? What are the differences between ICOs, STOs, and IPOs? What technological infrastructure is needed for a security token offering? How are security tokens issued? What are some of the key regulatory and legal issues of STOs? Who is qualified to invest in security tokens? How do institutional investors respond to the security tokens offering market? All these questions were being discussed during the forum. As stated by Vincent Molinari, the co-founder of Templum: “It is paramount to have events like the New York Security Token Forum to convene thought leaders, domain experts, and market participants to educate markets in order to advance the sector.”
Billionaire venture capitalist, Tim Draper, opened the forum with his full confidence that bitcoin and blockchain technology will transform all industries such as finance, banking, commerce, insurance, real estate, healthcare, government.
Where is blockchain headed in 2019? In the first session, Xiaochen Zhang discussed with Yorke Rhodes III, cofounder of Blockchain @Microsoft and Benjamin Jessel from Kadena. Yorke shared his personal blockchain journey in Microsoft and discussed three key trends in 2019 and beyond. Ben shared how Kadena is tokenizing assets such as funds, real estate and collectibles in both onshore and offshore markets to improve efficiency in capital markets.
The Executive Chairman of Malta Stock Exchange, Joseph Portelli, agreed that blockchain will transform the global capital markets. He pointed out, “Since the traditional listing process is complicated and expensive, small companies looking to raise capital in a cost-efficient way will turn to security tokens”. Jeff Bandman, the former CFTC regulator, added: “Though we have seen many exciting blockchain based innovations, we should never forget about regulations.” He led a new global industry body to draft a crypto code of conduct, which aims to achieve a positive transformation for financial services, society, and the global economy.
In the security token exchange panel, Vince Molinari shared Templum’s commitment to “Embracing regulation and modernization of securities law through continued thought leadership in creating standardization and conducting best practices of the evolution of capital formation and secondary liquidly.” Frank Walczak form Tzero made it very clear that “If investors’ rights and interests cannot be effectively protected in an incomplete regulatory environment, the advantage of the security token platforms will be reduced significantly.”
In the legal panel, Brain Korn, Annemarine Tierney, Greg Strong, and Habeeb Syed explained the most relevant STO exemptions, i.e. Reg A+, Reg D, Reg S, and Reg CF. In addition, Annemarine emphasized: “Templum has advocated that the SEC provide clear and specific guidance on a range of issues impacting the issuance and trading of private digitized securities, including around acceptable custody and clearing processes as well as when certain activities require broker-dealer registration. These issues appear to be the basis for the SEC and FINRA’s current decision not to allow issuers and certain other market participants to offer or trade digitized securities. Until these regulatory barriers are addressed, it will be difficult for a broad range of participants to enter the market and create scale.”
In the Pitch Session, entrepreneurs from startups including 1World Online, iComply, Cerus, and Omega, conversed with several investors from Atomic Capital, NovaBlock Capital, Wave Financial Group and AngelVest Group.
During the forum, FinTech4Good also organized a launch ceremony of the STO Handbook. This Handbook aims to provide an introductory guide to the security token ecosystem in the U.S. and to help readers develop a thorough understanding of STOs. The STO Handbook, now, can be downloaded from FinTech4Good’s website.
“Based on the STO Handbook, we will provide services to potential customers in various aspects of the STO market, including compliance advisory, strategy design for security token issuance, and the listing service at the security token exchange.
The STO Handbook is a joint effort of FinTech4Good and our partners. We will continue to work with our partners to build a strong ecosystem to scale up security token instrument. The NYSTF is just the beginning of many of our future activities,” according to Mr. Xiaochen Zhang, the president of FinTech4Good, “In collaboration with our global partners and sponsors, FinTech4Good will host the World Responsible Technology Forum (WRTF 2019) in New York City in September 2019. The WRTF aims to be a global platform for technology and impact community to share experiences and build collaborative initiatives."