Since the beginning of the month, the ICO market has been dealt some major damage.
Just recently, two of the world’s largest cryptocurrency market leaders, China and South Korea, officially announced the full illegalization of ICO offerings.
While many have perceived the recently placed regulations as cruel and unfair, they certainly come with good reason, as many fraudulent ICO’s have scammed millions of dollars from investors for completely illegitimate, and sometimes inexistent, blockchain “projects”. Moreover, the tokens offered for sale during ICO’s are priced according to current market metrics, even when the asset itself serves no valuable or use-able purpose.
For these reasons, ICO’s have been officially labeled as “un-safe” and “highly risky” investment vehicles, causing international attention as government officials seek to enact further regulation on the fundraising option.
However, initials coin offerings may now have a shot at a truly bright future.
Get ready for regulated token trading.
On September 27th, tØ (t-zero), a distributed ledger platform for capital markets, announced its collaboration with Overstocks blockchain-focused subsidiary, Medici, to launch a one-of-kind alternative trading system (ATS). This ATS is aimed to provide a fully regulated platform for to exchange cryptographic tokens categorized in the U.S. as securities.
This project came about from a joint-venture between RenGen (a financial technology company) and Argon Group (an investment fund/bank specializing in ICO fundraising). The two companies state that the ATS will be regulated by the SEC and the Financial Industry Regulatory Authority (FINRA).
In essence, this ATS will provide investors with a legally compliant, approved, and regulated alternative to a major securities exchange, such as the S&P 500 and Nasdaq.
If successful, this newly developed platform will be seen as a huge step forward for the cryptocurrency space. Simply put, there are no other regulator-approved options for U.S. investors to participate in security token trading.
Market Purpose
In the wake of an SEC decision to class certain tokens as securities, Medici, Overstock’s blockchain-based start-up, found itself with a fully function product ready to capitalize on the market’s current need for a regulated ICO option.
This year alone, the cryptocurrency investment market has boomed, having surpassed the $2 billion mark with ease.
However, this amount may be miniscule compared to what lies ahead.
Emma Channing, CEO of Argon, told CoinDesk in an interview that she believes her firms ATS will process $2 billion in trading volume within the next 12 months.
In addition to creating a regulated and “safe” ecosystem for a new type of security, Patrick Byrne, CEO of Overstock, claims that the new platform will reduce transaction fees by 80–90 percent over the current traditional security model.
Another clear benefit of utilizing a blockchain for this platform is real-time trade execution, rather than a 3-day time lag one would normally experience at a traditional stock exchange, Byrne said.
Overall, Byrne claims that decreased costs and faster settlement times will allow for a truly fairer market, one with greater liquidity and more efficient use-ability.
Conclusion
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