It is hard to navigate the fast-paced developments in STOs. The topic is at the intersection of regulated finance and blockchain technology, and understanding both is required.
Stefan Loesch is the author of a popular book on Fintech regulation, a financial services veteran at JPMorgan and McKinsey, and a thought leader on STOs. In his daily podcasts he provides concise expert commentary on one topic of interest arising from the news.
If you are an expert yourself, someone aspiring to become an expert, or are just interested in the topic, this is the podcast for you.
I was having a bit of a hiatus, but I think I've quite a decent excuse, because I was extremely busy. Apart from my other project I was working on the Bancor release v2.1 where I was retained to write the economic analysis paper. This was actually very exciting, and I _will_ make a podcast or two about it I promise. More exciting however is my new **Botcast** project which I believe is a world first: all TheShortSTOry podcasts will be available via a Telegram chatbot. This bot is, not unsurprisingly, called @TheShortSTOrybot. Go check it out!
Today we will be discussing the second part of the Uniswap paper . If you found yesterday's episode a bit dry, worry not. This one is more fun and economics, the mathematics stuff is mostly over. We are now moving on to the economics implications, and those are very interesting. Also honorable mentions of Sushiswap .
I am currently working quite heavily on formalising my understanding of Uniswap and Uniswap-style pools like the infamous Sushiswap pool that provided a fair amount of drama over the weekend. So instead of a news podcast today a short podcast on those two papers. The first one is simply a collection of important formulas , and the second one is a series of charts showing how Uniswap pools prices change with the volume .
Today's podcast is with Jeff Bandman , principal at Bandman Advisors [2,3] and an esteemed colleague at University of Nicosia where he is teaching a course on blockchain regulations . He is an expert on regulations, in particular in the US, and today we will be talking about SEC's exciting move to extend the definition of accredited investors [5,6,7]
The Japanse messaging giant LINE, creator of the Line friends, launches a blockchain development platform called LINE Blockchain Developers, and a crypto wallet called BITMAX.
In a true man-bites-dog story , Korea's largest blockchain firm ICON  now offers KYC services to Shinhan Bank, Korea's second largest bank  as Coin Telegraph reports.
Today's podcast is on @danrobinson's  medium post "Ethereum is a dark forest"  (the reference being of course the famous book from the Three Body Problem series [2,3]) where he describes how in Ethereum's mempool everyone raising the head gets sniped.
I started writing a paper on the Uniswap protocol, and in particularly how it imposes a _bleed_ on its liquidity providers, akin to the bleed option traders with negative Gamma experience. The full paper is here paper but below is the non-technical summary and conclusion.
Today's podcast is about Thomas Naegele's assessment of EU law, and Liechtenstein law in particular, with respect to security tokens and their (in)ability to be traded on regulated trading venues. Warning: my pdf of the post clocks in at 67 pages plus 40 pages of references.
A few days ago we had the reorganisation of the Ethereum Classic chain that was initially attributed to the mistake of a miner who has been disconnected from the network for 12 hours. Turns out it was an attack, and he or she made $5.6m out of it. Interestingly the playbook followed is well known , ht @edmund_schuster.
In our series on interesting deals in the STO space, today a particular gem because of the unusual asset class and the people involved. Asset class first: this is a security token [1,2,3] giving the investors economic interest in an online game called Infinite Fleet. This security token is not to be confounded with Infinite Fleet's in game currency . In terms of people involved there is obviously Samson Mow who is heading Pixelmatic, the developer of the game, and who also has quite a high profile as CSO of Blockstream, a crypto infrastructure company. The backers include Adam Back, Blockstream's CSO, Max Keiser, of the Keiser Report, and Charlies Lee the founder of LiteCoin who famously sold his holdings just before the market crashed.
The main deal platform seems to be BnkToTheFuture  who has supported quite a lot of companies raising fund in the crypto space, including Kraken [6,7]. The issuance is a SAFT, but they are planning to use the Liquid Network  eventually. Also involved STOKR  hence the deal being registerd both in the US and in Luxemburg.
For those interested in the legal framework under which the offering takes place, STOKR seems to only have an agent payments license from the French ACPR.
tZero  -- the subsidiary of Overstock who is one of the most active players in the STO market -- just updated their investors, and whilst this do not make a particularly happy reading it provides good insights into what is, and is not, happening in the STO market at the moment [2,3]. This comes after a very positive update only in June , and might be related to real estate tokenisation not delivering as expected .
After the podcast on German ship finance I made two weeks ago  I have come across another German platform because of an pretty extensive interview in BTC Echo  and some other news in German media . It turns out that those guys have been around for a while, there was a very good article on them in February  and an even earlier one last October , so it might well be that this is part of a concerted media push.
IMPORTANT DISCLAIMER: THIS IS NOT INVESTMENT ADVICE, I HAVE NO VIEW AS TO WHETHER THIS IS A GOOD INVESTMENT OR NOT, AND I AM IN NO WAY RELATED TO THAT PARTICULAR ISSUANCE. What I found interesting was that (a) there are two retail-focused German shipping offerings in the news, the one I talked about recently [1,8-11] and this one [6,7], and they have chosen markedly different investment structures.
In this article  I want to discuss the dynamics of Ampleforth [2,3], which is a crypto currency with its twist. Instead of issuing a fixed number of units, Ampleforth monetary supply expands and contracts dynamically to keep one Ampleforth valued at around 1 USD. The expansion and contraction is executed in a pro-rata manner, meaning that they do not impact the percentage of overall supply an investor holds. On first sight this looks like a stable coin, but on second sight it is clear that this is not quite the case -- it is a regular crypto coin whose price dynamics has been moved to play out in the volume space. What I mean with this is that when Ampleforth market cap goes up / down 10% then investors will feel the impact of that -- not by a change in price, but by the fact that they suddenly hold more / less currency units.
Banque de France selected the firms for its announced CBDC trial . Four out of the eight companies chosen are old economy giants who are venturing into the brave new world, but the remaining four are more recent upstarts: Iznes, LiquidShare, ProsperUS, and SEBA Bank.
It is interesting how technology gives a new lease to old principles. The medieval banking systems relied heavily on bearer instruments to assert ownership of financial assets, and this has over time be replaced with centralised registers. Now we see the rise of a new class of bearer instruments, eg via Corda, or now via CloudCoin which uses a very different -- and in many respects much more pedestrian -- way of avoiding the double spend problem.
1. https://cointelegraph.com/news/blockchain-free-cloudcoin-claims- secure-email-to-email-transactions/amp
Before we start: this is not a financial promotion, I am in no way related to this token offering, and I have no views whatsoever of whether or not this token is a good investment. With this out of the way, I am excited that there is another major security token offering coming out of Germany, a $50m subordinated debt token for investing into green shipping assets.
The article announcing this is so far only available in German , but there is a lot of information on the sponsor's page  and the subscription page . The prospectus has been approved by the FMA Liechtenstein .
After its acquisition of Swipe , Binance now announced details of the debit card it will be offering first in the EEA and later in the UK [1,2]. And Binance's CEO is amongst the beta testers [3,4].
I published an article on public key infrastructure and how it will impact custody and fund management today . I thought I might as well read it for you on my podcast.
In the last days there were two Ethereum transactions  that paid about $2.6m in transaction fees each, which even for Ethereum is a bit on the high side . After the first transaction there were two major theories: fat fingers, and money laundering . Now a third one has been added . So what was it?
Securitize -- the tokenisation platform -- has announced that they effectuated the first dividend-like payment on-chain, as Cointelegraph reports . The payment was for the Lottery.com security token about which unfortunately apparently not much is in the public domain . So whilst the details are a bit scarce this is definitely an important step forward in the tokenisation world .
Cointelegraph has a very good article  that discusses a recent paper published by the Phildelphia Fed  on CBDCs and whether they are a threat to the commercial banking system. The article refers to a number of differing views on this topic, including that of Marshall Hayner, CEO of Metal, who is largely supportive of CDBCs, and that from IMF's Tommaso Mancini-Griffoli who said CBDCs should be provided in public private partnership . It also provides a reference to important whitepaper  of the Digital Dollar Project . So what does this all mean?
Last week my course *Security Token Strategy* at University of Nicosia's IFF started for real, and this has kept me pretty busy. Today I recorded a number of videos for the course assignments, so I did not get around recording anything for the podcast. Instead I will be sharing one of the videos with you. It is about hash functions, and more specifically about the commit / reveal pattern that they allow implementing. To make it a bit more fun we are using it to play Rock, Paper, Scissors over Slack.
The course is now full, but we'll run it again in the not too distant future. If you are interested, contact me  or have a look at the course page .
This podcast also exists as a YouTube video .
In today's episode I am talking with Dr Mark van Rijmenam the author of the Organisation of Tomorrow  and who is a leading expert in the blockchain space and how it changes the future of work. In today's episode based on a recent blog post of Mark  we are discussing how blockchain voting changes the world of corporate governance by moving from a proxy-based voting system to a blockchain based direct one, and we end up discussing liquid democracy .
**Dr Mark van Rijmenam, Founder Datafloq and Mavin.org.**
Dr Mark van Rijmenam is Founder of Datafloq and Mavin.org. He is a highly sought-after international public speaker , a Big Data and Blockchain strategist and author of the best-selling book Think Bigger - Developing a Successful Big Data Strategy for Your Business. He is the co-author of the book Blockchain: Transforming Your Business and Our World , which details how blockchain can be used for social good. His third book, The Organisation of Tomorrow , discusses how AI, blockchain and analytics turn your business into a data organisation. He is named a global top 10 Big Data influencer and one of the most influential Blockchain people. He holds PhD in management from the University of Technology Sydney on how organizations should deal with Big Data, Blockchain and (Responsible) AI and he is a faculty member of the Blockchain Research Institute in Canada . He is a strategic advisor to several blockchain startups and publisher of the ‘f(x) = ex‘ newsletter  read by thousands of executives.
In line with the custody theme in the podcast I am discussing here the profound changes the use of a public key infrastructure will have on the world of financial services, in particular in the area of custody. Note that this is the audio portion of a video lecture.
Another piece of news fitting into the custody theme I am currently developing. As BeInCrypto reports , Gemini exchange integrates with the wallets on Samsung phones, increasing end customer security. See also the podcast I made with Dr Ken Tindell on the Samsung hardware .
As BeInCrypto reports  based on a report by Ryan Watkins of Messari [2,3] now about half of the total Ethereum market cap is in ERC20 tokens. That can have security implications for that eco system.
3. https://messari.io/article/the-evolution-of-value-on-ethereum ($)
As MPT  reports, Samsung just announced a new security chip for mobile phones , or -- as Cointelegraph refers to it  -- a "new chip to secure crypto transactions". In this episode I am talking with Ken Tindell about what this chip does and why it matters for (security) tokens and their custody.
**Dr Ken Tindell, CTO, Canis Automotive Labs.** Ken is a technologist and entrepreneur. He holds a doctorate in real-time systems from the University of York and in the past has been the CTO of several startups. In the late 1990s he founded LiveDevices to develop embedded software for automotive applications and what we now call Internet-of-Things, and was subsequently acquired by Bosch. He also co-founded Volcano Communications Technologies, a joint venture with Volvo Cars and Motorola, that developed communications software for CAN bus and developed the LIN protocol, and was acquired by Mentor Graphics. He currently is the CTO of Canis Automotive Labs, a hardware IP company focused on securing communications and computation in automotive systems.
2. https://twitter.com/kentindell (@kentindell)
Yesterday Finextra reported that another 23 banks have joined Italian's Spunta platform , on top of the 32 that have been present at the launch of the system a month ago . The project's goal is to simplify the reconciliation of interbank transfers, which for the time being is a pain-staking bilateral process. It has been sponsored by the Italian Bankers' Association ABI . The underlying technology is based on Corda [4,5] with ABI Labs coordinating the work of R3, NTT Data and SIA [6-9].
As widely reported today, Facebook's Calibra wallet today rebranded to Novi. Less widely reported however is the most important piece, then link-up with WhatsApp and Facebook messenger .
In related news, after having hired a regulatory-savy CEO  the Libra Association (which is independent of Facebook's division in charge of Novi) hires more people with regulatory experience .
This episode is the second of my Consensus interview episodes where I am discussing with some of the people I met at the excellent networking event what they got out of the conference, and what they thought of the virtual format. In today's episode we have Brian Nistler from Lowenstein Sandler, Carlos Cabrera from Sigma Capital, and Laura Harper Powell who is a regulatory policy attorney in the US.
**Brian Nistler, Attorney, Lowenstein Sandler.** Brian advises clients on legal, regulatory, and compliance matters related to broker-dealers, investment advisers, and cryptocurrency-focused businesses in the firm’s emerging practice representing regulated financial technology companies, including brokerage platforms, robo-advisers, crypto exchanges, and money transmitters. He also has experience advising venture capital funds, hedge funds, and private equity funds in various regulatory and compliance matters.
His experience includes serving as a liaison between clients and regulatory agencies regarding the changing regulatory environment concerning broker-dealer formation and changes to business, ICOs, investments in and custody of digital assets, P2P lending, digital asset exchanges, crowdfunding, and other emerging fintech. Brian has also handled regulatory investigations initiated by the SEC, CFTC, DOJ, and self-regulatory organizations. He has drafted a variety of agreements and no-action letters and conducted extensive research, drafting, and advising regarding the Dodd-Frank Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, and the JOBS Act.
Prior to joining the firm, Brian worked as a regulatory analyst for the Financial Industry Regulatory Authority (FINRA). While in law school, he interned at the Commonwealth’s Attorney’s Office in Arlington, Virginia, served as a law clerk for NPR’s General Counsel, and clerked for the Fraud and Corruption Section of the U.S. Attorney's Office for the District of Columbia.
**Carlos Cabrera, CFO, Sigma Capital and Quorum Ambassador Canada.**
**Laura Harper Powell, Regulatory Policy Attorney.** Laura is a regulatory policy attorney, engaging on fintech and blockchain issues msotly in the US.
Today's episode is with Thomas Barker, a software engineer and my goto person for everything blockchain technology, with whom I'll discuss Hyperledger Cactus that recently graduated from Hyperledger's Lab to the Greenhouse . Hyperledger Cactus is the old "Blockchain Integration Framework"  that allows different blockchains to interact with each other, and having standardised technology of this kind is a key step in the blockchain ecosystem growing up.
My sincere apologies for overrunning my time budget on this occasion -- my discussion with Thomas is almost 17 minutes. I did not have the heart to cut it as I think it is a good discussion on an important topic, but I promise I'll try to do better next time.
**Thomas Barker.** Graduating from the University of Warwick in 2004, Thomas wrote the words ‘Digital money techniques allow creation of unforgeable tokens’ in the future research section of his final report. Sadly he is not Satoshi, but does bring with him over a decade of engineering experience within FinTech. Thomas was the first outside technology hire of both P2P lending market Zopa, now valued over £400m, and BullionVault, a retail gold broker with Assets-Under-Management of over $2bn. He has been involved in the Ethereum community from the start. Attending every Devcon across three continents, and has been involved in a number of startups trying to bring blockchain into real work commerce. Presently, Thomas consults for a number of clients across Europe from tiny startup to giant banks.
2. https://twitter.com/thomasbarkercom/ (@thomasbarkercom)
After the long post on my future vision and tokenisation, and after a number of good conversations of twitter today a more focused post on what the value proposition of fractionalisation has to be for investors so that fractionalisation will take off.
This episode is the first of my Consensus interview episodes where I am discussing with some of the people I met at the excellent networking event what they got out of the conference, and what they thought of the virtual format. In today's episode we have Lourdes Miranda from Miranda Fintel Consulting, Harrison Wright aka "The Blockchain Recruiter", and John McLaughlin, CEO of McKurz Capital.
**Lourdes Miranda, Principal, Miranda FinIntel Consulting LLC.**
A Washington, DC-based cryptocurrency and blockchain compliance analyst and investigator; a financial crimes investigator; a Bank Secrecy Act and Anti-Money Laundering compliance officer and investigator; a former CIA officer and a FBI analyst with decades of experience in both the private and public sector. She is Certified Anti-Money Laundering Specialists and a Certified Fraud Examiner. As a consultant, she specializes in cyber counter-threat finance investigations, compliance, and financial intelligence collection and analysis for the US intelligence community, US law enforcement agencies, US and international financial institutions, the legal industry as well as the for the trade industry.
** Harrison Wright aka The Blockchain Recruiter.** Recruitement services in the blockchain space.
**John McLauglin, CEO of McKurz Capital.**
McKurz Capital are developers of defi products that are end-user friendly. They also provide STO derivative products. Their DEX is at mckurzcapital.com.
Apparently there is a "non-paper" circulating by the European Union that addresses future crypto regulations. I haven't seen it yet (please send it my way if you have it) but there are some details in CityAM .
As Business Insider reports , Sequioa Capital just closed a $14m funding round in the AI-based stockpicker, aka roboadvisor Vise . This ties in nicely with my 10 year vision for fractionalisation blog from Saturday , and it is in some ways _the other shoe dropping from the Charles Schwab fractional share trading story I talked about a few weeks ago .
Today's story  is about a Reddit user who claims to have lost 40 ETH ($8,000) by sending it to the wrong address . This is unusual because in principle addresses should have a checksum [3,4,5] but it is a real problem with the ill-designed ENS . This leads us to a discussion of Prof Schuster's paper on same related difficulties in the securities token space .
I am reading out the blog post on tokenisation and fractionalisation I wrote after Consensus 2020. If you want to read along -- or just read it -- you can find it here:
Consensus Distributed is over, and it was great, in particular the Zoom networking part. The networking was so good in fact that I decided to establish regular networking open hours .
As I was asked what "Zoom networking" is, let me briefly describe how it worked. The app (Brella; it had a few glitches but it got the job done) initially asked you to fill in your profile, including your interests. Then it matched you with others, and essentially you went through the list and suggested whom you wanted to meet. Brella was managing everyone's schedule, so you suggested already a specific 15 minutes time slot for a meeting, and the other person could accept, reject, or reschedule. Super easy. And I probably had 10-20 conversations per day, and I have to say that everyone I spoke to was super nice, the conversation was good, and I literally do not regret a single meeting. So also shoutout to everyone I met -- you are awesome!
So if you are interested networking with me, just follow the calendly link , book a spot, and we are on (I'll send you a Zoom link so please do make sure you have Zoom installed  by the time we talk). If you really can't make it during my "office hours", say because your time zone is such that it is the middle of the night for you, then feel free to book a 15 minutes slot on my regular calendar , mentioning that you'd like to network and that my regular hours dont work for you.
I am looking to seeing you in my virtual office -- and don't be shy. Just drop in!
The US patents and trademark office today published a patent by Visa , the card payments network, for a digital currency issued on a blockchain [2-4]. This is not their first patent in this area .
As the Moscow Times expected  and everyone now reports [2,3,4,5] Telegram cancels its TON project. The reason cited is the SEC's stance on the project and the on-going court case. For the STO market this sends mixed messages.
The Block reports the JPMorgan now serves Coinbase and Gemini  based on a story in the Journal [2,$] This is good news, especially after Barclays no longer agreed to serve Coinbase in August ago . Hopefully this is good news for other crypto firms who are finding it hard to pick up banking relationships and/or having problems with their existing banking relationships 
2. https://www.wsj.com/amp/articles/jpmorgan-extends-banking-services-to-bitcoin-exchanges-11589281201 ($)
It is Consensus  this week, and the conference is great (and it is free!). If anything it is more time consuming as virtual conference than as a real one, so I am not sure to which extent I can publish podcasts this week. But maybe talk to me there? Just schedule a call with me on their networking system !
I was a bit busy recording the "The Short STOry Academy" lecture on the economics of bitcoin mining  today, so there is no news podcast. Have a look though at the "The CoinDesk 50" article  linked in the notes, and the associated twitter thread . Good intro to the good and great of crypto. Also next week's "Consensus: Distributed" virtual conference  is definitely something you should check out.
Yesterday I covered a big news item, and today I'll cover what looks more like a curiosity for the time being but which could turn into a very interesting project in the digital assets space if it takes off. It is already a bit older but given it is a slow news day it fits right in. The Parisian artist Ben Elliot is working on launch the "Ben Elliot Token"  that will be tied to his future artistic output, and bestow other privileges on its holder. Is this a way for artists who are just starting up to kickstart their careers? And an opportunity for art investors to get in at the bottom?
Today's big news in the crypto space  is that Paul Tudor Jones -- the famous hedge fund veteran -- has a published a letter to his investors where he is very open about changing his investment mandate to be allowed to invest into BTC futures because of the current unprecedented macroeconomic environment. I will talk here about the "futures" part which involves a discussion about institutional custody 
Libra has a new CEO, Stuart Levey, currently Chief Legal Officer for HSBC and previously Under Secretary of the Treasury for Terrorism and Financial Intelligence under Bush and Obama . After the whitepaper v2  another sign of Libra playing in the big leagues.
After Robinhood and Fidelity, now Charles Schwab allows for “fractional” stock trading in S&P 500 companies, for a minimum investment as little as $5. Another step towards asset fractionalisation and making finance available for the masses.
Malaysia’s securities regulator – the Securities Commission — now allows e-wallet providers to distribute capital markets products through their e-wallet software  Finextra reports . The SC also makes the process of issuing securities easier. Whilst this is not necessarily targeted at crypto wallets it is nevertheless an important step for retail distribution of securities tokens in Asia.
In this bonus episode we’ll discuss one topic close to my heart: global stable coins. The ECB just published a paper on regulatory and financial stability implications of global stable coins . Whilst the results will come as surprise to noone except the author’s of last year’s v1.0 of the Libra whitepaper it is still worth going through them because they are important for the stable coin market.
Today’s episode is based on an article by Fintech News Singapore  about the release of tax guidance for crypto assets  by the Inland Revenue Authority of Singapore (IRAS). Mostly as expected, but some bad news for ICOs — and good news for STOs!
This episode covers two articles, one about the crypto segment being in dire straits because of the Corona crisis  and the other one about a16z raising a $500m fund to invest into crypto ventures , in a time where Silicon Valley valuations seem to go down . Does this mean that crypto and crypto finance in particular is going mainstream?
 https://www.ft.com/content/0a4a651e-8057-44f8-92e2-f23a89cd632a ($)
In this episode, based on an article by CoinDesk  we discuss Tether’s recent legal action in the US, trying to get hold of $800m that have allegedly been confiscated by the authorities, and the importance of stable coins more generally. Tether’s transparency page is here .
In this episode we discuss the impact of the upcoming halving in the Bitcoin block reward on the chain hash rate and chain security based on an article by Andrew de la Torre, Vice President of Pooling, in CoinTelegraph