Finance and Crypto

The Continuous ICO Model – Continuous Token offering

A newly founded fintech company hopes to use the token sale model for investments in real assets. But it is different from many previous projects.

Two Prime, based in Hong Kong, (founded by Marc Fleury) refers to the sale as Continuous Token Offering or CTO, in contrast to an Initial Coin Offering or ICO, where almost all tokens are traded at an earlier stage. The goal is to use the funds raised to make crypto a suitable new asset class that appeals to the financial world.

The company will initially release five million tokens (only five percent of the total 100 million to be created) on the secondary markets, the rest will be released in the next 10 years. This is similar to Ripple’s approach to its XRP sales, and the company said the process is similar to that of raising capital.

At the end of February, Prime’s two FF Accretive Tokens (FF1) will initially be traded on the Japanese crypto exchange Liquid. Prices start at $ 3 per token, the company said.

“One of the greatest successes of cryptocurrencies has been the rapid formation of funds, as demonstrated by the initial boom in coin offering,” said the company’s chief operating officer, Alexander Blum.

According to Blum, seed financing for start-ups through token offerings on exchanges overtook private equity in 2017. “Since VCs generally avoid the seed phase, [ICOs] filled a niche that traditional financial players have not addressed,” he said.

According to Two Prime, the token offers a purchase option that “combines the features of a closed-end fund, an asset-backed token and a secure store of value”.

CEO Fleury has invested $ 2 million of his personal wealth in the fund. The company also announced to CoinDesk that Hong Kong-based private equity firm SIB Investment Ltd. is the first external investor.

Fleury founded JBoss, a Java-based open-source application server, in 1999. The company was sold to Red Hat in 2006 for $ 420 million. Red Hat is now owned by IBM.

Regulatory risk

As with other startups venturing into token deals, the company must also avoid getting on the wrong side of investors or regulators.

Ripple, which has raised billions from the sale of XRP and equity financing rounds, has been involved in a class-action lawsuit filed by investors accusing the company of selling unregistered securities.

A number of companies have launched ICOs, which are later charged by the United States Securities and Exchange Commission with failing to register their tokens as securities.

Two Prime reported that it has consulted with law firms in various jurisdictions and has developed an approach that will reduce the potential challenges for financial regulators.

The company will first list the tokens on the Asian trading exchanges to determine how much grip the investment could earn from traders. Then it will be set up for Special Purpose Vehicle (SPV) in the United States to offer the tokens as security.

Unlike many other ICOs, the fund’s tokens are backed by real assets that, according to the company, are managed by professional portfolio managers. The underlying assets include a structured portfolio of debt, cryptocurrencies and equity instruments.

The first investments are focused on the blockchain sector, while according to Blum, the company could in future expand to other sectors such as green technology and smart city management.

“Our goal is to create a new asset class by applying traditional investment models and theories to crypto and giving the industry confidence and professionalism,” said Fleury.

COVID 19 – Reshaping Blockchain and Cryptocurrency Companies

Many people have been affected by the corona outbreak. People who have lost their jobs are now relying on government help to survive the pandemic. They are also looking at short term loans from private financial institutions like https://looselending.com/. But others are trying their luck on cryptocurrency mainly because the blockchain industry seem to be unaffected by the virus. Let’s take a look further.

The corona pandemic has affected many aspects of the cryptocurrency markets and the blockchain as a whole. Due to the outbreak of COVID 19, over fifty percent of the encryption conventions in 2020 were cancelled or delayed, and mining producers needed to shut down equipment development in China. Simultaneously, other companies took advantage of new options by digitizing business procedures and bringing employees online.

It appears that in terms of capital, the roadmap of the 20 largest crypto projects is not affected by the Coronavirus. This is because the implementation of key updates designed for 2020 is done by the blockchain rather than by personnel, and the staff required are working within a decentralized manner.

Coronavirus outbreak fears weigh on crypto as bitcoin slumps over 10% this past week

Blockchain companies make an effort to minimize budget and employees

For companies in the blockchain industry, this move can reduce the economic impact of the COVID 19 pandemic. Major blockchain analysis companies (Elliptic, CipherTrace, and Chainalysis) report that they have cut their entire staff or budget, or may do so in the future. The marketing aspect is another point that can reduce the spending of cryptocurrency and blockchain technology companies. Many blockchain companies have already canceled meetings and other conventions.

Cryptocurrency Exchanges

Large cryptocurrency exchanges (such as Kraken, Gemini, OKEx, and Bitstamp) do not seem to be affected by the coronavirus pandemic, and report increased user logins and transaction volumes. Binance ’s monthly futures trading report shows that by January 2020, the exchange ’s futures contract trading volume increased by 85%. In February, OKEx exchange OKChain was launched in the test network and its first decentralized financial application OKEx DEx, followed by the purchase of the Fiat gateway service “Buy Crypto”, which allows users to convert their Fiat to cryptocurrency in March.

The large-scale spread of coronavirus in Asia does not hinder the launch of Huobi Thailand. The other two major cryptocurrency exchanges-Poloniex and Bitfinex-did not postpone the planned launch this month-LaunchBase or Staking Rewards.

Vincent Poon, the company ’s vice president, said: “Since most of our business is digital, the pandemic has no real impact on our growth.” Bithumb Global ’s CMO Sunny Ng added that the company has accelerated diversification Development of trading products.

Ali Beikverdi, the founder and CEO of exchange software provider bitHolla, said that existing cryptocurrency exchanges used the company’s Exchange Kit software to achieve record transaction volumes. Beikverdi added: “This may be because more and more people are segregating online and trying to make a living through online cryptocurrencies.”

However, according to Beikverdi, potential exchange operators who want to start an exchange business are increasingly hesitant, causing providers to delay advertising and marketing content and reduce the creation of new content.