STO: bailout strategy or harvest the razor?

 STO: bailout strategy or harvest the razor?

Chaos and supervision, IC0 by the “crisis of faith” in the capital market, facing the world increasingly stringent regulation, a bunch of coals STO such as winter, get the attention of people. In addition to 10 in mid March, the SEC for the STO project legal approval, as if to project financing and project investors to see a little warmth of hope.

However, whether STO or other help to remedy a sickle, Public opinions are divergent. The daily planet Odaily recently STO was discussed, I hope the readers get some inspiration.

Try the US retail giant

Before the birth of STO, we have to mention a company, Overstock. Overstock company is one of the ten largest network business platform, before has been actively concerned about the industry chain block. In 2014, Overstock began to accept bitcoin to buy goods, to become America’s first major electricity supplier to accept bitcoin shopping.

Overstock CEO Patrick Bourne is an open mind, advocating freedom of the people, he said the company hopes to launch a “digital security use bitcoin technology”. He also hired developers and lawyers to do this thing.

Byrne hopes to provide a control by the central stock exchange, but by all over the Internet to operate without any central authority control.

Therefore, in 2015, Overstock introduced to the center of the Medici stock market, and won the SEC SEC approval, issuance of shares in the digital block chain, this is the first prototype of STO.

TZERO by Overstock in early 2017 established subsidiary company, is distributed billing platform of a capital market, what is the block chain technology and the existing market transaction process are integrated together, such as stocks, bonds, digital currency, through the blockchain way of accounting, in order to reduce the settlement time and cost, improve transparency, efficiency and accountability.

Generally speaking, maybe one day, you can directly use bitcoin to buy U.S. stocks.

Later, as a block chain company Overstock, tZERO launched the STO project issued in April this year.

TZERO President Joe Cammarata said the platform formally launched in May this year, after waiting for SEC audit.

In mid October, tZERO finally passed the SEC audit.

At the time, tZERO to investors in the mail said that their STO issue of meeting SEC requirements of the Securities Act, will be in circulation market in January 10, 2019 two. And also explains how to use the tZERO STO investors.

Even from the United States reported that Overstock CEO Patrick Bourne in a contribution to disclose a conference call, tZERO has already sold a warrant, this is a kind of securities holders the right to buy shares at about good price to buy a company at a price of $2 million 600 thousand fund.

This is the first by the United States SEC STO project supervision. Could you see here confused, what is STO, what is the significance?

The usual explanation is that Security STO, Token Offering, the securities regulatory framework in token issued is determined, in accordance with the requirements of laws and regulations, public offering through legal compliance certificate.

But in some industry insiders, STO is in fact IC0 has been criticized by people under the condition of financing in a legal way, it is simple to understand, the legal form of “IC0”.

Is still in the early stages of liquidity is not high

TZERO (token exchange service platform) is currently the first issue of the STO project. In addition to Polymath, Harbor (token distribution platform), OpenFinance (token distribution platform) Network (token exchange platform) etc..

The message said, OKEx also plans to create a STO exchange, has been with the Malta stock exchange to set up a joint venture company, and according to its regulatory framework to establish STO exchange.

In order to better explain why so many institutions and capital investment STO project, we first looked at the IC0 market.

Mid October is autumn, cool weather in the transfer period, with the temperature of the same coin, are getting cold. And in 2017 when the fiery scene be quite different, then bitcoin prices soared from $950 to $17000, up from $4 to Wright currency $330. Few people realized the so-called “overnight” desire, and attracts people’s attention, so that the money is still in the ring and block chain, premature infant technology into the public view, the project investment is so concerned about the blockchain investment. A large number of projects started IC0, the fastest way to financing activities.

Because the IC0 project of barbaric growth, there are a lot of “wanpiao” dragons and fishes jumbled together, the cut chives air project. Fish in troubled waters behind investors and hope that through the purchase of token investment funds individual investors are damaged due to lack of supervision, more than chaos.

Because of this, governments began to gradually strengthen the supervision of IC0. Also the domestic regulators from the beginning of last September 4th, to stop the release of IC0.

On the other side of the United States, SEC is responsible for the country due to the securities supervision and management work, rather than passes the economy, so the type of securities through regulation, namely ST (Security Token). The practical tokens, such as IC0 token is raising, not in the list of supervision.

So, on the one hand IC0 don’t need to go more processes can be performed rapidly financing; on the other hand, due to the lack of government endorsement, compliance IC0 itself has been questioned.

Therefore, questioned in the IC0, facing the lack of supervision, it makes sense to break STO.

So, know the origin of STO, we have to talk about what the recent popular concern is what. For this concept, our chairman Lin Yang for the communication with the DRC fund. Lin Yang has 20 years of experience in the field of finance, has nearly 10 years of experience in risk management. Once the IBM company risk management solutions for financial services, Yongan transformation and innovation partner.

In Lin Yang’s view, STO has its unique advantages, the first is compliance with national regulations, issued by the industry’s legal compliance audit, project team, project code background, physical assets / company profit statement and other aspects of the regulation. Second is the public fund-raising to reduce costs and improve efficiency; examination and approval, the regulatory process more intelligent, at the same time is 7*24 hours of trading patterns. The third is to accelerate the flow of global assets, STO can make global assets through securitization, through securitization assets can be global transactions, and high-quality assets could go global.

“STO is TSO, the first card re securitization. Not to the securitization of assets securitization through asset securitization, through to the securities regulatory system to issue, its significance lies in the indivisible, non flowing assets into segmentation, can flow, have practical significance.” Lin Yang stressed.

Lin Yang also talked about Polymath project. Polymath is a STO project from the United States, was established in July 7 2017, aimed at financial securities transfer to block chain system, known as one of the leaders of the STO.

“The STO tokens issued in terms of compliance, the intelligent contract underlying technologies, two secondary market trading platform, market acceptance and other aspects, are at a very early stage, but liquidity is not high.” Lin Yang said.

In Hongkong, did not stand to try

At the beginning of November, the Hongkong SFC suddenly announced a virtual assets including new regulations, said STO allowed investment. For institutional investors, the Commission put forward as long as the license can be invested, so willing to invest STO of the regular army can work in just ways.

Liang Jieyang, chairman of the Hongkong block chain association said in an interview that the new regulations that institutional investors can invest in STO, but need to have 1 or 9 license. As a result, willing to invest STO of the regular army can work in just ways based on the regulation of admission. The new regulations also for the issue of STO pointed out the direction and found that compliance issued in the securities law within the scope of traditional.

This is Chinese for Hongkong so STO the latest policy, then other countries and Chinese in mainland China for the STO is what policy?

At present mainly in the United States foreign policy, according to the provisions of the securities law, the issuance of STO had two choices: one is through the SEC registration; two is in accordance with the relevant regulations of one or more. Most of the STO now and early equity financing, use is the two choice. Such as Reg D Reg D is not exempt from registration, financing limit only to qualified investors, do not need SEC approval. But there is one year lock up period and generally only in the existing transaction between investors. If the need for global users, has more specific regulations for reference.

Chinese, there is no clear statement on STO. According to China’s “Securities Law” and relevant laws, the issuer of securities issuance, shall be approved by the Commission and other regulatory authorities, the main issue, pricing and sale of securities, securities information disclosure should follow certain rules, and by the exchange, continuous supervision of industry associations, investors.

10 the end of the month, the tZERO STO project by SEC after the audit, the specific process standard consensus STO chief researcher Li Zipeng told the opening share for STO. One mentioned, if the project application in the United States, at least need to understand the securities law of the United States SEC, different laws have different requirements in private, private object is also different.

“Global circulation cost”

The future of the STO, Lin Yang said, STO for instance, which is of positive significance.

“If the STO to the governments of the world have gradually recognized by the regulatory authorities, and that may be the most direct, greatly promote public chain accelerated landing scenarios.” Lin Yang said.

STO in the United States by the trial, it attracted attention in the world, many are doing block chain project financing, even some financing needs of the entity are eager to project.

For this phenomenon, Lin Yang believes that the basis of national regulatory framework of the securitization of the assets securitization recanalization is of no significance, some superfluous. But if you could not securitization or poor liquidity of the assets securitization after the first pass, and then through securitization, is due to the economic pattern card.

For example, the cattle and sheep idle capital passes, so that the owners can use digital assets to the insured, and securities owned property, can be recognized by the world and circulation, STO need to cooperate with the national authorities, the formation of standard specification, can by extension.” Lin Yang said.

Right now, some block chain companies are also trying to seek STO around the globe, but Lin Yang believes that a higher threshold.

“In the securities law of STO to realize the global circulation, it is necessary through the issuance of certificates of securities in different countries meet quite different regulatory requirements, compliance costs are extremely expensive.” Lin Yang said.

Li Xiaolai is not optimistic about the STO, said in a public event, he personally did not think STO what the next big role in popularizing the blockchain.

“In theory, STO is not what the new concept of the past for a long period of time, a lot of people are doing such a thing, only recently as a new term out. I do not believe that the non block chain industry assets plus the blockchain concept will fire up, this is not consistent with common sense, but some people’s wishful thinking. Of course I do not deny the role of STO, but I don’t think what it is a noteworthy trend.” Li is laughing.

For STO, how far, how much is the degree of market acceptance, ener Angel Fund founding partner Li Zhu believes that this may need to develop relevant standards.

He said that the industry has begun to try to develop some criteria of STO, such as Polymath ST-20 standard, ERC-1400 standard Ethernet square community. I believe there will be more and more perfect standard in the future.”

In addition, Li Zhu also believes that the real popularity of STO, need to be able to fall, but also embrace the supervision, provide the public privacy protection chain.

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