As of this week, the World Bank and Commonwealth Bank have enabled secondary market trading recorded on the blockchain for bond-i (blockchain operated new debt instrument), the first bond to be created and managed through its life cycle using blockchain. According to a press release, this new development marks a significant step for bond-i since its first issuance in August 2018, and helps demonstrate the potential for blockchain to make the process of raising capital and trading securities more efficient and transparent. In related news, a leading multinational professional services firm and an investment firm specializing in digital assets recently released a joint report detailing results of research into 100 of the largest global cryptocurrency hedge funds. The report found that despite the volatility of the cryptocurrency market in 2018, cryptocurrency funds showed surprising success at fundraising, with median assets under management (AuM) growing approximately three-fold as of Q1 2019 from the median AuM at fund launch in January 2018.
The ICO market is seeing a significant slump, according to research by cryptocurrency exchange BitMEX, with Q1 2019 returns at $40 million, down 97% from the same time period in 2018. As returns on ICOs flounder, some projects are opting to rebrand as initial exchange offerings (IEOs). However, an SEC senior advisor recently warned that U.S.-based exchanges that facilitate IEOs may be in violation of the law if they do not comply with applicable licensing requirements for broker-dealers, alternative trading systems or national securities exchanges.
This week, the SEC initiated cease-and-desist proceedings with Canada-based NextBlock Global Ltd. and its owner Alex Tapscott, co-author of the book Blockchain Revolution, for falsely representing that as many as four prominent members of the blockchain community were acting as advisors to NextBlock in order to facilitate fundraising. Noting remediation efforts undertaken by NextBlock and a settlement agreement with the Ontario Securities Commission that required NextBlock to pay $700,000 CAD, the SEC issued a civil penalty of $25,000 against Tapscott.
For more information on this week's post, please see the links below:
- World Bank and CBA Partner to enable Secondary Bond Trading recorded on Blockchain
- PwC: 2019 Crypto Hedge Fund Report
- Research: ICO Market Down Almost 100% From a Year Ago, Raised $40 Million in Q1 2019
- SEC's Crypto Czar Says Exchanges That List IEOs May Face Legal Risks
- In the Matter of NEXTBLOCK GLOBAL LTD. and ALEX TAPSCOTT
- SEC Slaps Blockchain Author Alex Tapscott, Firm With Fines Over Securities Violations
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