Security Token News for Week Ending 30 April 2020

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Here is our pick of the 3 most important Security Tokens news stories during the week:

STOKR Partners with Lemon Way Enabling Payment Gateway for Euro Security Token Issuance

STOKR S.A. has partnered with payment platform Lemon Way S.A.S as payment solution provider. STOKR is now subject to the supervision of France’s ACPR as well as Luxembourg financial regulator Commission de Surveillance du Secteur Financier (CSSF).  STOKR will now be able to perform Euro payments on its investment platform, enabling a full end-to-end Euro payment gateway for security tokens. Every issuer who is issuing digital securities on STOKR will now receive a Lemon Way merchant account, allowing him to raise Euro investments using SEPA direct debit, SEPA transfer, credit cards, and debit cards.

Why It Matters:

Last week, we reported how STOKR (Luxembourg) is managing an STO for Shanghai video gaming company, Pixelmatic. This partnership with Lemon Way (France) is another step in the integration of European infrastructure, providing muscle to STOKR, a digital marketplace/investment bank built on blockchain providing access to early-stage and growth-stage opportunities as digital securities.

Lemon Way is a major European payment institution providing online marketplaces and alternative finance platforms with payment processing, wallet management, and third-party payment in a KYC/AML. Its payment solution is used by more than 1,400 marketplaces in Europe including 200 crowdfunding platforms.

OpenFinance Network, to De-List Assets Unless Issuers Step-Up

No one is trading tokenized securities on OpenFinance Network (OFN); Well, not nearly enough to cover the cost of hosting such assets.  As a result of this limited activity, OFN has found itself between a rock and a hard place. With OFN garnering funds for operational costs through trading fees, it shouldn’t be surprising to hear that it needs a new approach.  This new approach is simple – token issuers must sign new contracts, and, essentially, pay a listing fee for their tokens. If this doesn’t happen, OFN indicates that on May 21st, all tokenized securities will be de-listed from its platform.

Why It Matters:

This was a slow week in STOs, – slowness itself is news.  Chicago-based OFN has been a trendsetter, launching the first digital securities trading platform in 2019.  OFN offered free listings.  Exchanges typically charge initial and annual fees. Now OFN needs to have its operational costs covered by issuers because trading volume has been so anemic commissions are not at meaningful levels. 

Japan’s Financial Watchdog Certifies Two Cryptocurrency Regulatory Organizations

Japan’s financial watchdog has accredited two crypto-focused associations as Certified Financial Instruments and Exchange Associations.

According to an April 30 announcement, the FSA has recognized the Japan STO Association and the Japan Virtual Currency Exchange Business Association (JVCEA) as self-regulatory groups for derivative transactions and security token offerings of crypto assets. JVCEA will subsequently be renamed the “Japan Crypto Asset Trading Business Association” on May 1.

Why It Matters:  

This is an iterative move forward for the Japanese industry. There are approximately 21 registered and licensed exchanges in Japan, with three additional companies registered as second-class members (major American crypto exchange Coinbase, Digital Asset Markets and Tokyo Hash).

 

 We have a self-imposed constraint of 3 news stories each week because we serve busy senior leaders in Fintech who need just enough information to get on with their job.

For context on Security Tokens please read the chapter on Security Tokens in our Blockchain Economy book and read articles tagged Security Tokens in our archives.

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