Securities Tokens

THE BAREFOOT VC \ MARCH 2018

In the past week, more news started to emerge about the SEC subpoenas that I alluded to in last week’s newsletter. While it remains to be seen what the SEC plans to do with the information, it is clear that they are signaling to the market that they are serious about investigating practices over the past year and will be using that information to, at the least, provide more concrete guidance moving forward.

These recent regulatory probes have led to a new class of cryptocurrencies: the security token. While definitions vary, with the broadest being that this category would encompass a token that is issued in compliance with current securities laws (including disclosures), some companies are looking at how the secondary market, in addition to the issuance, can be compliant without hindering liquidity. Harbor, one of the newer companies to emerge in this space, is looking to utilize smart contracts to provide compliance in the aftermarket. They recently released an overview of their proposed offering (the R-Token) and the PICO (Private ICO):

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