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Dilendorf & Khurdayan’s, Max Dilendorf
Discusses Demand for STOs in Asian Markets



Max Dilendorf:

There is a lot of activity in this space, both in the U.S. and Asia. We finally see that the SEC and FINRA have started issuing broker-dealer licenses, they are ready to license broker dealers in the U.S. that can sell digital securities. We expect that the trend will follow in Asia, and in fact we see that Asia is waking up, Southeast Asia, Hong Kong, Singapore, and we speak to our partners out there on the progress of their broker dealer applications and ATS licenses.

For the industry to really move on and develop, we need more players in the space to market, sell digital securities, so that’s what we see. On the issuing side, we see interest from both U.S. issuers and non-U.S. issuers. Product types, we’re talking about real estate, we’re talking about fund tokens.

What I’m personally really excited about is for the company to organize a big real estate project in New York, and for the company to go out there and raise successfully, close the offering in Asia. But for that we need broker dealers. We need broker dealers on the ground, marketing, selling, educating investors and that’s when we’ll see this industry growing and succeeding. My personal sort of modest projection is that this will happen sometime, like first project raising in Asia will happen sometime in 2020s.

So let’s first talk about China and we were actually were in China in November 2018 when the Central Bank of China came out and said that we are placing a permanent ban on digital security offerings in STOs and no Chinese citizen can participate in them. So I think it’s very tricky with China. It’s first of all, hard to organize assets that belong to Chinese companies and it’s hard to work with Chinese investors. So I... very, very difficult market.

I guess the same, I’m actually not an expert in Korea to comment on them, but there are much more flexible jurisdictions in Southeast Asia that are much more open to working and developing frameworks for digital security offering such as Thailand, that’s my personal favorite, from the digital security perspective and food. In Asia, I think Singapore and Hong Kong are pretty open to sort of getting the business through the door, establishing and developing, you know, this infrastructure and environment. That’s my sort of five cents on Asia.