VeradiVerdict - SEC Crackdown - Issue #12

VeradiVerdict

Hi, I am Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing into blockchain companies and cryptocurrencies. I focus on early investments and want to share my thoughts and what’s going on in the industry in this weekly newsletter.


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Editorials

The big news from the SEC came out last week that it had settled registration charges with two ICOs, Airfox and Paragon, after publishing its guidance on ICOs in 2017. Airfox raised $15 million in its ICO, and Paragon raised $12 million.


The SEC ruled that each company’s token was a security, and these two companies broke SEC law because they failed to comply with existing rules governing the registration of securities. In response, both companies agreed to reimburse harmed investors in their ICOs, pay $250K in fines and register their tokens as securities.


It looks like the days of quick returns on ICOs and selling to the public is over. ICOs are now considering tokens as possible securities and are taking a few steps to protect themselves:


1) Selling only to accredited investors

2) Waiting at least a year from the private sale to the token generation event to comply with traditional securities laws

3) Excluding US investors

Digests

Mapping out the Security Token Ecosystem

The Block’s Security Token Ecosystem map was reviewed by Vertalo and a handful of industry experts for accuracy. The accompanying article is solely by The Block.

Augur’s Antifragility: A Few Thoughts

On the night of the midterms, as America sat glued to CNN and Fox news, some of us instead tuned into Augur to get a pulse on the election. That night, the peer-to-peer prediction platform hit a new…

The Next Step in Cryptoasset Valuation

We have recently published our first extensive research report on a digital asset, which for legal reasons is unavailable to general public. If you are a financial/digital asset markets professional…

In the Tweets

Chris Burniske

@cburniske

Bear markets strengthen the survivors. It's okay to feel sick through the process, it's these depths that later give strength.

6:44 AM - 19 Nov 2018

Jameson Lopp

@lopp

No, Bitcoin isn't dying - it's just preparing for this year's Black Friday sale. https://t.co/FeJe5S2V2z

10:13 AM - 19 Nov 2018

News

Twitter: Bitcoin Scams Came from Third-Party Marketing App

Days after Twitter and Google had their accounts hijacked by bitcoin scam operators, the social media giant is blaming a third-party marketing app.

Tencent Games Forms Partnership with Blockchain Esports Platform

Tencent Games has partnered with a blockchain company to create a streaming platform that will give users 24/7 access to their favorite esports players.

Malaysia Launches Blockchain Certificate Verification to Combat Degree Fraud

The Malaysian Ministry of Education is turning to blockchain technology to combat degree fraud in order to maintain the integrity and reputation of universities in the Southeast Asian country.

Nvidia Stock Didn't Drop Due to Crypto Bear Market, Inaccurate Claims

The market cap of Nvidia has dropped by more than $23 billion and analysts were quick to claim it was caused by a drop in demand for crypto

Thailand's Main Opposition Party Holds Primary Election on Blockchain

Thailand’s Democrat Party, the country’s main opposition party has become the first major political party in the world to carry out primary elections entirely on a blockchain.

Christie's Records $318 Million Art Sale on a Blockchain

A new milestone in blockchain adoption has been set with the successful recording of a record-breaking art sale on a blockchain.

Aussie Crypto Startup Power Ledger Brings P2P Energy Trading to Largest US Market

News today sees notable blockchain project Power Ledger launching its peer-to-peer trading product for renewable energy. Power Ledger will launch with American PowerNet at their home base in Pennsylvania.

Regulations

The SEC cracks down on two ICOs, creating a template for future enforcement

There was huge news on the ICO/token sale front from the SEC on Friday regarding two initial coin offering (ICO) issuers. Let’s break it down.

Lawyer: Phase Two of SEC's Enforcement is Slow Painful Grind For Crypto

According to securities litigation attorney Jake Chervinsky, the second phase of the SEC’s enforcement on crypto is a painful and slow grind for the sector.

New Products and Hot Deals

Activision Blizzard vets raise $16 million for item-based blockchain gaming platform

LA startup Mythical Games has raised $16 millionn from Galaxy Digital and others to fund its vision of a blockchain game item platform.

Crypto Exchange KuCoin Raises $20 Million From IDG, Matrix, Neo Global

Singapore-based crypto exchange KuCoin has raised $20 million in Series A funding backed by IDG Capital, Matrix Partners and Neo Global Capital.

Big Investors Put $2.25 Million Behind Bitcoin Reward Startup Lolli

Lolli, a Bitcoin rewards program aimed at helping adoption, has piqued the interest of some pretty big investors who are throwing $2.25 million behind it

Meet with Me

I will be traveling this fall for certain events, and to meet with investors. Let me know if you and your colleagues would like to meet in person.


Miami, November 20

Los Angeles, November 21

New York, Consensus Invest, November 27