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Cryptocurrency News: What Is Security Tokens in 2018?

Cryptocurrency News: One of the major topics of discussion in cryptocurrency at the moment is around the emergence of security tokens. Security tokens are backed by real assets such as an equity, shares of a limited partnership company, or commodities.

 

This was around Winter 2017 – 2018. The same time when the Securities and Exchange Commission (SEC) in the USA began focusing their attention on this new and previously unregulated form of cash. Before many other national, government authorities worldwide decided to follow suit. The opening of crypto-futures arguably exacerbated the pressure on cryptocurrencies which resulted from prying government eyes. It was also around the same time when the first ‘bitcoin futures’ contracts were launched and sold by enterprising new and existing firms – with the SEC ruling creating a significant space for traditional investment and old-money to pour into the market.

 

Since those early days of regulation in the West, cryptocurrencies have eventually dichotomized into: ‘security tokens’ and ‘utility tokens’.

The definitions used by coin creators and the communities can be flexible, with many fundraisers opting to class their coins as ‘utilities’ to avoid potential additional legal / administrative repercussions – however the most commonly accepted definition is that:

  1. ‘Securities’are asset backed tokens (AKA fungible, often equivalent to a real-world asset).
  2. ‘Utilities’are functional assets within the blockchain project in question’s eco-system whose value is based in more abstract terms.

Tokeny hails itself as “The end-to-end platform to issue, manage and trade Utility and Security tokens” significantly cutting down on needs for otherwise unneccessary intermediaries.

The role which many international ‘crypto-havens’ play as independent advocates of cryptocurrencies on the world stage. One example is the ways in which such financially liberal (and often nation-state) countries play in facilitating innovation and business migration from stricter countries.DSTOQ made its way to the news recently in-part due to being ‘the first fully-licensed cryptocurrency’ as issued by the tax-haven government of Vanuatu. Also notable was the recent and unexpected surprise public reveal / launch of the company itself and MVP. The company’s decision to acquire official legislative backing through the ‘Commonwealth of Nations’ member country is a means of bypassing the strict legislation put in place by agencies such as the USA’s SEC.

The SEC has been fickle with their outlook on various cryptocurrencies starting their public announcements with an aggressive tone regarding all tokens as-of-then being unregulated. They backed up their bark with a series of bites which came in the form of crackdown operations against crypto companies in the country which had been suspected of carrying out fraudulent actions. On a positive note, the government financial authority has also been establishing strong relationships with various blockchain companies who are willing to play ball with the recently created, developing ground rules. This move hasn’t convinced everybody and US based or US citizen targeted ICO fundraising campaigns are all-but-strictly forbidden under current rulings.

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