NY-Based Blockchain Lab Underlines Regulations on Security Tokens and Advocates the Future of Stablecoins

Nakamoto & Turing Labs, a New York-based blockchain & AI research lab, held a virtual talk Wednesday evening on the blockchain technology and its regulatory environment. Daisy Li, Corporate Counsel of cryptocurrency trading platform BitMart, gave the lecture. 

The talk began with the definition of Initial Coin Offering (ICO) and Security Token Offering (STO). ICO refers to companies launching their utility tokens while STO functions as a private key, with which individuals gain access to network services through passing personal information checks.

Regulations on ICO vary from region to region, i.e., both the US and Hong Kong see utility tokens as commodities. However, security tokens are under strict regulatory rules of the US Securities and Exchange Commission (SEC), since STO falls into the realm of investment contracts, as in the renowned Howey Test.

Daisy Li addressed that it is noteworthy to realize cryptocurrencies like BTC and ETH are not securities since they are decentralized while security tokens need a certain amount of personal info.

She further discussed the growing popularity of STO in the US, especially in the case of tZERO, fintech owned by Overstock, which issues security token offering to shareholders as a digital dividend. Overstock announced on May 20 that it completed the issuance of its STO, Digital Voting Series A-1 Preferred Stock (“Series A-1”)(OSTKO), on tZERO’s Alternative Trading System (ATS).

Daisy Li ended the lecture with an analysis of stablecoins. She believes stablecoins have both the advantage of bitcoin and fiat money – allowing cross-border payment and having a stable price. 

As stablecoins have developed from first-generation, like Tether (USDT), to third-generation tokens issued by governments and big companies such as JP Morgan and Facebook, she considers future usages of stablecoins open to more possibilities.

By Yiran Dai

Image from Pixabay

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