
Coinbase reportedly gets approval from US regulators for tokenized securities - srameshc
https://techcrunch.com/2018/07/16/coinbase-reportedly-gets-approval-from-u-s-regulators-to-start-listing-tokenized-securities/
======
a_d
Tokenized securities are private securities that comply with securities laws
using Reg D, specifically Rule 506(c). In some cases they are Reg A+ (that
come with JOBS act provisions used for crowdfunding). They are very important
for the ecosystem for two reasons:

1) because ICOs are very important way of fundraising and they need to become
compliant

2) they make illiquid assets like private real estate RIETs more liquid

Since KYC/AML is enforced and investor accreditation is key to buying these
securities, this will reduce scam and legitimize ICOs and security tokens
overall.

I can’t wait to see all the interesting possibilities with making illiquid
assets more liquid using tokens to represent shares. This is an exciting
development. Congrats to Coinbase.

~~~
a_d
I can also imagine startup equity being tokenized. Where an exchange like
Coinbase acts like SecondMarket (now called Nasdaq Private Market). This might
be a great way for early employees and founders to get liquidity before the
company IPOs. It would change the startup game completely. A lot of things to
look forward to here.

~~~
mihaifm
I difinitely hope it's going in this direction, but this space needs to mature
a little bit, and perception needs to change. Currently ICOs are viewed as
scams and some of them are still insanely overvalued.

~~~
startupfounder
The way to overcome this is to write milestones into the smart contract that
unlock additional funding after the milestone is hit in a given time period.

The issue with today's ICO is that the market demand is so high it would be
silly for groups to leave money on the table. Just like bands leave money on
the table because the value of their tickets > the price they sell them at.

Many people on the buy side who get in early to ICOs are essentially scalpers
whereas the people who run the project usually have no business raising the
funds they do in their first round.

Milestone funding would solve both of these issues.

------
wmf
Because these tokens are _unregistered_ securities, I assume Coinbase will
restrict trading to qualified investors.

~~~
mkirklions
What makes ETH a security? Its not an investment in a company equity, its a
store of value.

~~~
wmf
We're not talking about ETH; we're talking about new tokens that are
explicitly marketed as securities so there's no need to debate whether they're
securities or not.

------
davidgerard
This is a reblog of the original Bloomberg article:

[https://www.bloomberg.com/news/articles/2018-07-16/coinbase-...](https://www.bloomberg.com/news/articles/2018-07-16/coinbase-
says-it-has-green-light-to-list-coins-deemed-securities)

------
KasianFranks
They have competition "$6.3T BlackRock Targets Cryptocurrency & They’re Not
the Only Ones" [https://hackernoon.com/6-3t-blackrock-targets-
cryptocurrency...](https://hackernoon.com/6-3t-blackrock-targets-
cryptocurrency-48bdccadc531)

------
spo81rty
I'm confused because the example tokens were just more common crypto assets.
Not real tokenized securities of real companies.

On the other hand you have companies like Liquifi who are tokenizing real
private securities for any companies stock.

~~~
Legogris
Are you talking about Cardano, Basic Attention Token, Stellar Lumens, Zcash
and 0x mentioned in the article? These are not supposedly assets. These were
added prior to this announcement and don't really have any relationship to
this. AFAIK CB hasn't announced any particular security tokens for listing.

------
erentz
Tangential to the tokens/securities issue: I’m surprised that any US exchange
is allowed to list coins like Bitcoin Cash where their creators are clearly
attempting to defraud people. It seems there should be some protection against
that to be legally compliant.

Second tangent. I’m surprised they’re allowed to list coins which are insecure
and vulnerable to attacks which could leave the exchange short. E.g. As
recently discussed when [https://www.crypto51.app](https://www.crypto51.app)
was posted coins like Ethereum Classic and Bitcoin Cash etc. could all be very
easily attacked. And it seems there is little an exchange could do to prevent
themselves from losing a lot of money from such an attack if used against the
exchange. This could make them unable to pay their customers what they’re
owed. What protections do they have against this?

~~~
cocktailpeanuts
You're a victim of social media propaganda. It's not your fault though. Most
people have busy life and they don't have time to stay on top of all the drama
so they only hear from "mainstream sources". The thing is, the original
Bitcoin community leaders have control over the largest websites for Bitcoin
related content (bitcointalk and /r/bitcoin subreddit and so on) and they
control their message through their channels and censor anything about Bitcoin
cash. So everything you hear about Bitcoin and Bitcoin cash is pretty much a
result of censorship and propaganda, which is why you only hear about Bitcoin
cash being a scam. But this is far from truth.

If you don't believe me, find the smartest people you know who are
professional crypto investors, they will say they secretly hold bitcoin cash
but never speak out because they will immediately be labeled as "scam
investor", and nowadays character assassination is really scary on Twitter so
most people who actually know stuff stay quiet.

The whole Bitcoin thing is meant to be forked, and that's the whole point--
that's why Bitcoin as a whole is anti-fragile. If something doesn't work out
with one approach, there will be another fork of Bitcoin that may succeed with
a different approach, but the original Bitcoin holders--unless they're stupid
enough to sell everything just because they want "the real bitcoin"\--will
keep holding the same amount of fork coins, so everybody wins.

As for the details on Bitcoin vs Bitcoin Cash, they just have different
philosophies. Bitcoin wants to focus on stability whereas Bitcoin cash wants
to focus on usability. None of them are "scams" and there's nothing wrong with
each party. Some people have strong opinions towards either of the forks, but
most old Bitcoin investors stay quiet and are just waiting out to see how it
all ends, because they have nothing to lose. If Bitcoin wins, then good. If
Bitcoin cash wins, that's also good because they have the same amount of
coins.

Think about this for a moment. What would happen if Bitcoin Cash dies because
"it's a scam", and the original Bitcoin is the only option left? And what if
that approach doesn't work out? Then we are left with nothing. I think it's
great that these two forks co-exist for now and have chance to prove
themselves.

~~~
CPLX
> smartest people you know who are professional crypto investors

This is genuinely, if inadvertently, hilarious.

~~~
cocktailpeanuts
i know what you mean, but traders do exist, and smart people exist. and
sometimes there is an overlap no matter how small it is. Most traders are
idiots though.

------
grizzles
And in a decade or less all the stuff that Coinbase trades now will be looked
back upon as an embarrassment.

~~~
icelancer
How is this different than basically 95% of the stock market, including the
pink sheets?

~~~
grizzles
It's the difference between equities and junk bonds (which is what most crypto
is). So you can't currently do stuff like this:

[https://www.theatlantic.com/magazine/archive/2017/05/frank-a...](https://www.theatlantic.com/magazine/archive/2017/05/frank-
and-stevens-excellent-corporate-raiding-
adventure/521436/?single_page=true&utm_source=twb)

