Editor’s note: This article from the chain of the world (ID:lianneican), author: reference Jun, authorized to release the daily planet.
Into the bear market, ICO completely occupied, while the STO (Security Token Offering, namely securitization tokens issue) was born, unusually hot up, quickly became the new focus of all the eyes. The talk of the ICO meeting to STO, all kinds of learning organizations such as STO like bamboo shoots after a spring rain surges, STO funds have been founded…… All this seems to let us see the fiery look ICO.
At this time, Beijing Internet financial industry associations issued a warning to the risk of STO. 12 4, Beijing Gold Association issued “on the implementation of risk prevention of illegal and criminal activities in the name of STO tip” (hereinafter referred to as the “tip”). “Prompt” pointed out that “in the near future, there are still some institutions or individuals in the name of STO to continue to engage in advocacy training, project promotion, financing transactions and other related activities.”
At the same time, pointed out that “here, we solemnly remind the relevant organizations and individuals in the city: all financial services should be included in the regulation. STO is suspected of illegal financial activities, should strictly comply with the provisions of national laws and regulations, immediately stop on the STO of all kinds of propaganda and training, project promotion, financing transactions and other activities. Suspected of illegal organizations and individuals will be driven away, close the site and mobile APP platform, its business license shall be revoked and severely punished etc..”
“Tips” released as a timely rain, for a STO of cooling down.
STO in the Chinese territory is not legitimate
STO is the ICO (the first token issue) after being hit by the country, a new concept of smoke. Some people regard it as the “regulation” version of the ICO is not excessive. Some people think that the law under the guidance of the enterprise to the United States according to the record type passes through the issuance of securities funds, is completely legal. So what STO is illegal, or legal compliance at home and abroad through the guide of lawyers? For this, Xiao SA lawyer pointed out that STO is not valid in the territory of Chinese (illegal public financing or illegal issuance of stocks, Securities Act) cannot Chinese citizens for financing.
In China, the first generation of ICO is strictly after the upgrade version of the STO, the only difference is improved in transaction cost, transaction speed and mobility etc.. The article points out that the virtual currency version 2, there is no real innovation, is still in the premise without approval, no certification, through the issuance of virtual currency illegal fund-raising to the public.
In December 7th, the “Economic Daily” published entitled “to guard against illegal securities issued” a stirring among the dry bones of the article said, whether it is the so-called blockchain stock issue, is the first virtual currency, or securitization tokens upgraded version of the issue, these dazzling “Securities innovation” are the essence of illegal financial activities.
Finally the article puts forward: “Specification for securitization token distribution market, should be legal, publicity, investor protection and other aspects. First of all, should be in accordance with existing laws and regulations, strictly abide by the September 4, 2017 Chinese people’s Bank and other seven departments jointly issued the “on the issue of financing risk prevention token notice”, thorough investigation of unauthorized illegal public financing behavior; secondly, strengthening propaganda and education, so that the majority of investors don’t flourishes psychology, away from illegal financial activities involving all types of virtual currency again, the virtual currency market; the “vest” and hidden overseas phenomenon, promote supervision forward, improve investor appropriate management system as soon as possible.”
The people’s Bank of China vice president, director of the State Administration of foreign exchange Pan Gongsheng said recently, “financial activities must undergo strict market supervision. Any financial activities can not be divorced from the supervision system, to strictly abide by the laws and regulations, not to conceal in the name of technical nature of financial activities. The establishment of the financial institutions engaged in financial activities, must accept access management according to law, the exhibition industry scope of subject, access management and daily supervision institutions should be consistent.”
In our country, facing the public financing, financial services is the essence of the category, and the financial business in China is a licensed service, strict supervision by the central bank, bank insurance, should the Commission and other departments. The legitimacy of the premise of the existence of the domestic STO, is required to obtain the state authorities approval. This is the premise of legitimacy.
From the existing legal documents and passed regulators, STO may be considered a form of ICO. Of course, does not constitute illegal fund-raising crime, but also a concrete analysis. But one thing is clear, without approval, public financing, a huge legal risk.
In China in STO will face what kind of punishment? The issuer or employees of the project, some may be suspected of criminal risk. According to the “Supreme People’s Court on the trial of criminal cases of illegal fund-raising explain the application of law issues” release 2010 No. 18 sixth: “without the approval of relevant state departments issued by the transfer of ownership in the form of companies issuing shares or corporate bonds to the community is not a specific object, issue, or to the specific object in companies issuing shares or corporate bonds of a total of more than 200 people, should be identified as article 179th of the criminal law” without issuing shares, company and enterprise bonds”.
High second is easy to touch on charges of illegal fund-raising crime, generally refers to the crime of fraud and crime of illegal deposits from the public. The two charges is mentioned in the 94 announcement, to distinguish whether for the purpose of illegal possession. If the public for the public to raise funds in China, Xu to lure or promise to return, stakeholders, there may be suspected of the two charges.
Third easy to touch the high-risk crime is the crime of illegal business. According to article 225th of the criminal law, without the approval of relevant departments of the state, illegal operation of securities, futures or insurance business.
Sentencing, committed crime of illegal deposits from the public 3 years of fixed-term imprisonment or criminal detention, or impose a 20 thousand yuan to 200 thousand yuan fine; a huge amount or other serious circumstances, at least 3 years to 10 years imprisonment, and impose more than 50 thousand yuan to 500 thousand yuan by the fine. Allowed to issue shares is less than 5 years.
So, it is illegal to engage in ICO or ICO in Chinese disguised territory, STO is no exception.
The different attitudes to STO
In February this year, the Canadian Securities Exchange (CSE) announced the launch of the new trading mode of STO, this is STO’s first official debut in front of the world; in October, the NASDAQ securities intends to launch a platform to issue tokens, the message was ranked the industry hot topic list. The United States, Britain, Germany, Switzerland, Canada, Singapore, India, Barbados and other countries have begun to try the STO project.
From the project type, the STO project mainly focused on the platform, fund management and projects such as the three major categories. The platform business types mainly include: the issue of cloud backup and network platform, trading platform, virtual credit platform, platform, an asset investment trading platform, the congregation raised platform, ICO hosting platform and cross chain information management platform; project the main business types of clean energy vehicle, car sharing, distributed storage calculation other solutions, such as social software.
But because the national conditions and the law, international supervision of the STO attitude is not a.
The United States “cautious tolerance for the STO, allowed to apply for”. In practice, the ICO is supervised by the federal government of the US Securities and Exchange Commission and the Commodity Futures Trading Commission SEC CFTC. The Commission will in addition to bitcoin currency Token and Ethernet are classified as securities, and the securities Token all included in the regulation.
But not everyone can buy STO, according to the existing regulatory framework, only qualified investors to buy, the federal securities laws funds reach a certain threshold for investors. Over the past two years, including the annual income of more than $200 thousand (or $300 thousand, and the reasonable spouse) this year is expected to pay the same. Or have more than $1 million in net assets, either alone or together with the spouse (excluding primary residence real estate). Bank, partnership, enterprises, non-profit organizations and trust companies and other entities may also be qualified investors.
For STO, the EU level only conform to the requirement of the relevant securities regulations. The ESMA at the end of last year and early this year issued a notice of the issue of tokens in Europe must satisfy the following regulations, including the prospectus disclosure regulations require brokerage underwriting of financial assets to be responsible, responsible for the authenticity of the data and the continuity of the prospectus published inside. At the same time, requirements of financial assets listed on the compliance exchange, compliance through a brokerage license to issue.
Singapore is considered to be the most friendly country ICO/STO. 11 2016, the monetary authority of Singapore (Monetary Authority ofSingapore, MAS) issued the financial regulatory guidelines (FinTech Regulatory sandbox technology SandboxGuidelines), provides a relatively isolated space for financial innovation of science and technology; 11 2017 MAS, released through digital certificate issued guidelines (a Guide to Digital TokenOfferings), a specific number through the cards belonging to the capital market products, except in accordance with the conditions of exemption, which constitutes a security product, by the securities regulatory.
In Japan, the permission of the registered token used as currency, have Japanese merchants to accept customer use bitcoin payment, but the provisions of the regulatory authorities of each token issued must have a license with the local exchange cooperation.
Canada in August 24, 2017, Canadian SecuritiesAdministrators (CSA) officially announced that the securities law requirements applicable to digital currency. The Canadian Securities Exchange also intends to establish a STO trading platform.
Chinese Hongkong in June 9 2 2018, the Hongkong Securities Regulatory Commission issued a “Commission for the prevention of encryption currency risk” warned investors of the announcement, said in the announcement, the market risk increased gradually, the Commission will continue to monitor the management of the market, the necessary time to take action, at the same time, Hongkong also sent a letter to the Commission. Is the local market to attract investors 7 ICO organization, the statement will involve ICO digital tokens are considered securities, will be included in the regulation.
Thailand securities and Exchange Commission (SEC) said that according to the “digital asset law (Digital Asset Act)”, planning the STO overseas in Thailand company belongs to evade supervision of wrongdoing.
Malta financial instruments test act is being developed, through the issuance of certificates of securities shall have the obligation through this financial tool to test and apply the “virtual method of financial assets”. For example, negotiable securities, money market instruments, collective investment fund, through credit derivatives or carbon emissions quota type still exist supervision according to the existing market in financial instruments directive.
In our country, whether ICO or STO are not legitimate, and strictly prohibited.
In fact, whether it is ICO, IMO, IFO, STO, in essence, is to pass card for the carrier of the financing business. The self-discipline management of ICO is more focused on the issuer, STO pays more attention to accept supervision through the issuance of certificates, from this perspective, STO has a positive aspect, but also represents passes financing in the earlier stage of growth after savage, began to actively embrace regulation, in a more transparent and open the way for development.
Attached: supervision has issued STO:
The United States Securities and Exchange Commission SEC is currently the main regulators of global STO project, at least half of the project under their supervision. The following items: the information available in the United States SEC Polymath (Babado J), Corl (Canada), Rapidash (Chinese), Drivezy (India), telegram (Russia), Harbor (Singapore), Nexo (Switzerland), tZERO, Minthealth (USA), SPIN (USA), OpenFinance (USA), Indiegogo (United States), Aspen Digital (USA), Blockchain Capital (USA), Science Blockchain (USA), Lottery.com/AutoLotto (USA), Filecoin (USA), TrustToken (USA), Templum (United States), Equidate (USA), sharespost (USA), Siafunds (USA), BizShake (USA), Andra (Capital the United States), StartEngine (USA), Scientificcoin (USA), SPiCEVC (Israel). The Scientificcoin project is also dependent on the Swiss financial market supervisory authority FINMA Aspen Digital project supervision, but also by the financial industry regulatory authority FINRA regulation in the United states. In addition, the United States coinbase circle project alone by the financial industry regulatory authority regulatory FINRA.
At present, there are two China to the rest of the STO project, respectively is Rapidash and Bankorus (MI, the former type of Business Finance) is distributed storage computing solution and has the application information available in SEC. The latter focus on intelligent investment, by clean capital investment.