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This sounds great until people realize that only qualified investors will be allowed to trade security tokens.
Social network Gab is attempting to issue security tokens [1] under Regulation A+, which allows the general public to invest. The SEC hasn't approved it yet. [1] https://www.startengine.com/gab-select
This sounds great until people realize that only qualified investors will be allowed to trade security tokens.
Komodo and a few other decentralized exchanges break this issue pretty easily. Same reason privacy coins cannot be shut down.
This sounds great until people realize that only qualified investors will be allowed to trade security tokens.
> If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This step forward is being made possible by our acquisition of a broker-dealer license, an alternative trading system license (ATS), and a registered investment advisor (RIA) license. > ... > This is all be…
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>we can go back to building valuable companies Like what? >with a whole new way of funding them. What's wrong with US Dollars?
Crypto securities don't replace the US dollars. They replace the shares you're buying when you invest in a company. You are welcome to use US dollars for that if you want. Chances are depending where the companies are based, getting the money in USD to them could be tricky though. What company people are going to build is anyone's guess, but mine is that there's going to be a lot of them. Silicon Valley is only but a…
Honestly, I can see an "regulated"[0] crypto securites derivative market being deeper than the underlying crypto securites themselves since they'll trade more OTC.
[0] To the same degree that any government can regulate trade of their currency/debt on global markets.
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The hacker would suddenly discover the various international justice systems. The tokens would be tainted, unspendable, and worthless. A wild guess at the potential reward for unmasking the hacker? ($950B * 0.3 * 0.001 --> ~300 M USD). After the first such hack, companies might add a clause to the bylaws enabling the company to re-issue stock to the aggrieved party, restoring balance to the universe.
> The tokens would be tainted, unspendable, and worthless. No they wouldn't because the whole "decentralized system" makes it so you have to get EVERYONE to agree to blacklist those tokens BEFORE THEY ARE TRADED or else it fails because the hacker can tumble those tokens across dozens of different cryptocurrencies on every exchange across thousands of accounts. You will never be able to hard fork every cryptocurrency…
Public ledgers are public. If the US IRS, perhaps coordinated with Interpol, publishes a blacklist of coins, those coins are toast.
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The cost of tracking and trading securities tokens isn't the reason for why there aren't shares for 'anything you can think of'. Is this actually solving a real problem that someone has?
I am in Argentina. I can do an investment on a company being founded in France tomorrow and cash out in 3 months on a secondary market to a buyer in Angola. The friction involved in doing this in a pre-crypto world makes it a non-starter. One of the reason VC has its characteristic geographical distribution is because exit opportunities are extremely localized. No more. This in turn unlocks a ton of talent-capital sy…
You could do the same thing with normal investments, if trading houses and banks didn't do any KYC checks.
This sounds great until people realize that only qualified investors will be allowed to trade security tokens.
Earlier quoted context omitted.
> The tokens would be tainted, unspendable, and worthless. No they wouldn't because the whole "decentralized system" makes it so you have to get EVERYONE to agree to blacklist those tokens BEFORE THEY ARE TRADED or else it fails because the hacker can tumble those tokens across dozens of different cryptocurrencies on every exchange across thousands of accounts. You will never be able to hard fork every cryptocurrency…
It only takes a few countries imprisoning people who trade in tainted coins/tokens before they become untouchable. Public ledgers are public. If the US IRS, perhaps coordinated with Interpol, publishes a blacklist of coins, those coins are toast.