Security Token Offerings (STOs) can rekindle the flame of love for digital currencies

Coins Network – the most prominent blockchain media and marketing firm in Hong Kong- has partnered with Bloomberg Businessweek to host the Hong Kong Blockchain Summit 2018. The hall was fully filled with blockchain activist and founders from all over the world. Apart from attracting a crowd, the conference witnessed many meaningful exchanges between the attendees and the speakers. The panel discussion was star-studded with luminaries: Mr Bonnie Cheung, a Venture Partner at 500 Startups; Henry James, Fincross International Deputy Chief Executive Officer; David Wang, Executive Director of GSX and Thomas Borrel, Chief Product Officer at Polymath.

Hong Kong Blockchain Summit 2018

While the talks mainly focus on the outlook of 2019 and STOs, the main takeaway was that the blockchain market is booming with opportunities to innovate and thus, attract funding.

 Fincross International Deputy Chief Executive Officer, Henry James, said:

“The market is tough now, but we are still at an early stage. Hence, this market has huge potential especially in STOs and can definitely attract investors with large amounts of illiquid assets.”

Panel Discussion held during Hong Kong Blockchain Summit 2018

We scored an interview with the team behind STONetwork, a company branch out of Coins Network, to talk more about the upcoming trend of STO and how you should embrace yourself for the next wave of crowdfunding.

Interview with Mr Eddie Yeung, Business Development Director of STONetwork.

  1. What inspire you to start STONetwork?

There are lots of traditional investors from finance, real estate or startup venture who hope to catch the investment opportunity derived from the development of blockchain and digital asset. They are usually more risk-averse and prefer investing in projects which are regulated and supported by actual asset. Therefore, STO may open the door for this group of investors. Also, a number of asset owners in Hong Kong as well as in the wider APAC region hope to release the true value of assets with lower liquidity or illiquid assets, STO can serve as one of the key ways to achieve this goal. The demand on STO in Hong Kong is increasing with limited information in this space, so we establish STONetwork to provide STO related news globally and useful information to investors and asset owners.

  • How would STONetwork differ from coin network?

Established in July 2018, CoinsNetwork has been focusing on news around blockchain space, targeting different blockchain applications, industry trends and development of cryptocurrency market. We aim to support blockchain industry to become mainstream and provide the most important news to readers. As the demand on information around STO increases, we set up a new platform making it easier for readers to get related information. Even though both of them are news platforms, the objectives are slightly different. CoinsNetwork focuses more on macro views whereas STONetwork focuses on micro views on STO projects and related services providers, providing in-depth analysis and useful information for readers to understand how to apply STO.

Ecosystem of Security Token created by STONetwork
  • As the regulations become stricter all around the world, how would STO aim to comply with the ever-changing legal landscape?

When cryptocurrency market was bullish last year, many startups applied blockchain-backed ICO as one of the fund-raising tools. However, some ICO scams were found in the market potential due to the immature technology or the fast-changing markets. Therefore, various regulatory parties around the globe including U.S. have been keeping an eye on the new community-based economy model. The nature of STO is different from that of ICO. STO leverages digital securities issuance through blockchain technology. It is classified as part of securities and therefore under the regulation of securities law. Monetary Authority of Singapore (MAS) issued new guideline recently, suggesting STO is under their regulated area, licenses are needed for different service providers such as trading and issuance. This also explains that regulatory parties are keeping an eye on STO space. Due to the nature of STO, we believe it has the potential for mass adaption.

  • What is the competitive advantage of STONetwork?

In recent Hong Kong Blockchain Summit 2018, the panel discussion focusing on STO was well received. A lot of the audiences were interested in the space and we had quite a few related enquiries on the day. There are limited platforms dedicated to STO information or news in Hong Kong, Taiwan or wider South East Asia region. STONetwork is up and running, we believe we can benefit from first-mover advantage and stand out from the current market. We are partnering with Liquefy, blockchain-based STO technology provider and blockchain-based real estate platform i-House.com to establish STO Lab, aiming to promote STO development in APAC. With the support and strength of the alliance, it is an important push to the development of STONetwork.

  • Would STO replace ICO? What are some of the difficulties projects will face by doing so?

The nature of STO and ICO are different, STO is mainly used to support the tokenization of asset to increase its liquidity; whereas ICO aim to build community and make sure there is capital for projects which are beneficial for the community to develop. STO and ICO are targeting different market needs and are not replacing one another. There were some scams in ICO market and some projects that didn’t proceed due to the immature technology. These resulted in a massive drop in the price of tokens which stopped investors from entering or staying in the market. Some of the projects planned to raise capital through ICO, but due to the change in market condition, STO is adapted. STO related activities are regulated under securities law, for blockchain projects which aim to raise fund through STO, it is essential to have asset to back the project. For projects which only contain topline thoughts, we believe it would be challenging for them to raise fund through STO.

  • How would STONetwork help the projects with the difficulties?

If the blockchain projects fulfil securities law’s requirement and are suitable to raise fund through STO, STONetwork can help the teams to connect different types of investors through community meeting, networking and marketing event and more. We have strong relationship with different STO service providers in the market which different project teams can have access to various support such as legal and technology.

  • What are the future plans of STONetwork?

STONetwork’s news platform is up and running with the coverage of security token and Security Token Offering (STO), ranging from information and development of different service providers such as exchanges, issuers and details about funds. We are also planning to launch STO Hub in Q2 2019, a platform for different project teams to share their project details with a wider group of audiences in a more convenient way.

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