Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide.
Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, security token offerings, equity crowdfunding, STO, TAO, ICO/ITO, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Blockchain, STO, TAO, ICO, Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.
He is a member of the Crowdfunding Intermediary Regulatory Advocates (CFIRA) in the USA, and a contributing author to The Fintech Book, the world’s first crowdsourced book on Fintech globally. He writes for Sharewise, Locavesting, Equities.com, Business.com, Crowdfund Insider, Crowdfund Beat, Bankless Times, and Agoracom.
Oscar has been recognized as one of the 10 most influential Hispanic Leaders in Canada. In May 2010, Oscar A. Jofre Jr. was recognized by the Rt. Hon. Stephen Harper for his accomplishments.
Oscar was awarded the Vision 2012 Business Man of the Year by the Toronto Hispanic Chamber of Commerce on September 2012.
KoreKonX: Creating the world's first highly-secure permissioned blockchain ecosystem for fully-compliant issuance, trading, clearing, settlement, management, reporting, and corporate actions for tokenized securities worldwide. KoreConX is the all-in-one, AI-based, global blockchain platform that manages the full lifecycle of tokenized securities to ensure compliance with securities regulation and corporate law. Connecting companies to the capital markets and secondary markets to facilitate access to capital and liquidity for private investors.
Welcome to Security Token Insight, brought to you by the Security Token Academy. The security token industry is here and will provide a key foundation for the evolving financial internet. The Security Token Academy provides insights about this new era for security token enthusiasts, investors, and issuers. The security token industry is here and you can get involved.
Hi. I’m Adam Chapnick coming up on today’s episode of Security Token Insight, in your security token investing news, Securitize receives a massive investment from Japan. Plus, we’ve got an expert interview with Oscar Jofre, CEO of KoreConX and highlights from our New York city meetup panel. That and more is coming up on this episode of Security Token Insight.
Now, it’s time for your security token investing news. Up first, Token Soft announced plans to support Commerce Block. Commerce Block is a public blockchain based infrastructure which enables the distribution exchange and storage of tokenized assets and securities. Commerce Block also provides issuers the ability to deploy a permission chain while leveraging Bitcoin’s proven technology stack, according to Token Soft CEO Mason Borda. By the way, Token Soft is a gold corporate member of the Security Token Academy. To learn more, go to our website SecurityTokenAcademy.com and click the directory tab, then select corporate member.
In other news, OpenFinance has raised 8.6 million dollars, as per their form D rule 506-C filing. The company could raise as much as 50 million dollars, should they choose to do so. OpenFinance strives to utilize blockchain technology to advance liquidity in both traditional and nontraditional assets.
And finally, Securitize announced that it raised a seven figure sum from Japanese financial services Holdings. The exact amount was not disclosed, however. Securitize’ plans for the funds include building out their new office in Japan. Carlos Domingo, CEO of Securitize had this to say, “We’re going to do business there and that involves, not only finding customers in Japan, but also localizing the technology and making sure you know the language for the next similar types of integrations that you might be looking at.” Securitize is a gold corporate member of the Security Token Academy. To learn more, go to our website SecurityTokenAcademy.com and click the directory tab, then select corporate member.
The Security Token Academy is proud to present an expert interview with Oscar Jofre, CEO of KoreConX. KoreConX is the world’s first highly secure permissioned blockchain ecosystem for fully compliant tokenized securities worldwide. I sat down with Oscar to discuss where the security token industry is headed and whether or not more regulations are needed. Take a look.
So, shifting gears to sort of the big picture, obviously our security token industry here has evolved over, especially this past year. Where do you think this industry is headed?
For us, we’re seeing the traditional business, when we first launched our digital security protocol in October, 2018 with you, Adam, in New York, it was great. People were trying to figure out these... we’re offering a very different protocol, a permission-based one. And, at the beginning, we were targeting the early stage companies like everybody else trying to get that one that was looking for the big win. But, interesting for us, something different has... at least for us. We’re seeing the traditional companies coming out. We’re seen companies that have been around for ten, 20 years. We’re seeing companies that really see the value of tokenization, but without the sacrifice or negligence of compliance. These are people that have raised capital before.
And what happens here is that they know the right questions to ask. They’ve done it before. So, when something is not there, they get scared or they get spooked. And we’ve been very fortunate that we’re attracting that kind of clients.
So, when we first launched, we were looking at companies that they were early stage. They had formulated in less than a year. Now we’re looking at companies doing 250 million dollar raises, 850 million, and so on. But all of them have been well established, well established companies and entrepreneurs. So, the uptake for them, it’s not really about the digital securities, it’s about the offering. The fact that the offering itself is being tokenized is just a bonus. It’s not the primary reason why the investor is investing in that company.
And I think that’s the biggest takeaway that I’ve gotten. And I see, at least for the next two years, investors are investing in companies for what they are, not because of the digital asset of it. That’s just a bonus component to it. It’s not the primary.
Interesting. Yeah. And, I mean, you’re speaking also to how a lot of these sort of, let’s call them mid-sized, mid large-sized companies are recognizing sort of the infrastructure benefits of having a digital sort of ecosystem that you really can empower. And I guess you can sort of infinitely scale. And that’s what they really need. And that’s, I’m sure, what they love. What about trends in terms of things that are being tokenized? You have a unique insight into this. Are you seeing any tokenization trends in the industry?
Well, because KoreConX is agnostic with all our clients and we’re not being broker dealers, we take on all commerce, right? So, we’re seeing quite a bit of different ones. But the top three that I would say right now are a surprise to me... real estate is not. We all know real estate is the big hot topic. The second one is film. Film is one that’s catching us by a little bit of surprise. And the third one, cannabis, and the other one mining. And I’m talking traditional mining for Bitcoin. I’m talking about resources, gold and silver.
So again, we’re seeing traditional companies, that normally would go in a different route, come to tokenization as an alternative way of providing security to the investor rather than, hey, I’m tokenizing it and this thing is just going to go like gang busters. No. It’s about the business first, and then tokenization.
Yeah. I guess building on that, are there any sectors or industries that maybe we haven’t seen yet but that you see could benefit from tokenization that maybe we’ll expect to see in the coming year or two?
Well, I think no different than what we foresaw in crowd funding. I mean, we were all rah, rah that it was going to be technology companies. And I think we did see that at the beginning of October, 2018. I think we had two or 300 companies all based in technology. The problem with technology companies is that again, no track record, just getting started, hadn’t built anything. So, they need to get some traction. Obviously, they were late in the game. Obviously, they wished they’d launched in 2016 when you had an idea on a napkin and you can raise millions of dollars.
So, I think technology companies are going to re-emerge again, but I think we’re going to see more traditional. We’re going to see very interesting companies. At least in our world right now what we’re seeing is resources, manufacturing, we’re seeing telecommunications, cannabis, mining. So, these are traditionally based. And technology, I would say, is not even 1% of what we see right now. And that could easily all change. But that’s where we are right now.
Interesting. So, what about the regulatory environment? Do you think it’s a proceeding in a positive way? Are the regulations, specifically the SEC, are they too harsh? Is it not enough? Where do you see that?
This is a tough question because we all have different views on. But I’ll say this, as an entrepreneur, and I’ve said it globally to everybody, I think our regulators have done a lot for us. They’ve given us a lot. The question is, are we taking it to the point? Are we abusing it? Are we not adapting it properly? And I would say right now, what we demonstrated from 2016, 2018 is that we abused it.
So, therefore, I think what regulators are doing right now globally, not just in the United States, globally, is they’re taking it back. And what they need to do is they need to bring it back because so much money has been swindled, stolen from investors. And fortunately, yes, it’s only a small few, but that small few is hurting everybody. It’s hurting legitimate companies who are trying to raise capital legitimately and are not able to do so.
So, why is this important? Because right now the only types of companies that are able to raise capital and tokenize are companies that have been well and established. Investors need to know this company is real. So, if you’ve got an early stage startup that has a great idea, isn’t getting off the bandwagon, it’s not even to able to get started because there’s this mistrust.
So, as far as regulators are concerned, for me personally, I think there are some areas, yes, they could move faster to make things a little bit more smoother. But right now, given the regulations that are currently in place, I think they’re great. I mean, what we really need is a global one, but we’re not there yet. I mean, right now there’s only one country in the world today that has a global exemption to allow a private company to access and raise capital from the non-accredited investors. And that’s the United States. So, how much more could you ask for?
We have the full interview with Oscar Jofre on our website. Be sure to check it out. KoreConX is a gold corporate member of the Security Token Academy. To learn more, go to our website SecurityTokenAcademy.com. Click on the directory tab and then corporate member.
Did you know that you can get the latest industry updates in our free weekly newsletter, The Security Token Edge? Well, the newsletter is packed full of insightful information about the security token industry. To subscribe and get your free weekly copy, go to our website SecurityTokenAcademy.com. We also invite you to check out the digital wrapper on Medium. It is our new behind the scenes series with the teams building out the security token industry. These are in depth interviews covering a wide variety of topics. You can view these when you follow us on Medium. You can find more information on our website SecurityTokenAcademy.com.
The security Token Academy held another successful meetup, this time in New York city. And we want to thank everyone who attended. We had a big crowd inside the Sunset Terrace at Chelsea Piers. Security token experts and financial services professionals were on hand for an evening of informative discussions, networking, food, and drinks. Professionals and corporate members of the Security Token Academy took part in a special panel discussion. Take a look at what they had to say.
So, let’s start off with this question. Back in 2017, 2018 there was a huge appetite for these so-called utility tokens that were not being treated as securities. And, as the space has evolved, the appetite for that seems to have decreased. And there’s this evolution towards now tokenizing equity, as opposed to some sort of network utility token. Why has that been the trend, this tokenizing equity thing? And is there still even an appetite for utility tokens? Why don’t we start with Robin. And then, we can all jump in.
Sure. So, in my practice, we’ve certainly experienced that shift in interest. I think one rationale or argument would be that it’s a much safer route to take if you’re a non-blockchain business and you’re looking to raise capital, but you see the value proposition of digital asset securities. Then pursuing a capital raise in reliance on a traditional exemption like Reg D506-C, or even Reg CF, it’s just a much more conservative approach to take while still bringing a blockchain element into your capital raising strategy.
Yeah. I mean, I’m happy to go. I think that the biggest thing that I see is that basically regulators started to take notice and it’s not the wild, wild West anymore. And so, I think it’s not a bad thing. While it’s like in the short term, everybody panicked and there was this downturn in the crypto space. But I think what’s happening is the market is maturing. People are taking a step back and figuring out, okay. How can we do this compliantly? And so, people in this space, as well as regulators and the larger players, take the digital asset space seriously. And so, people are trying to figure that out and work with regulators. And who people are thinking of it from long-term approach and trying to achieve long-term success versus short term gains are taking that approach. And so, some of that takes time, unfortunately. And it takes more time than people would like. But you can’t do it without getting some of the key stakeholders on board.
Yeah. And I always found the concept of a quote unquote pure utility token to be interesting because, at the end of the day, I think it was very difficult to distinguish a utility token just from an investment. And you weren’t getting much utility from some of these tokens that were out there. And you were also not really getting any sort of equity position. So, I think that people started to think about it a little bit and they were like, wait a minute. This is not really... like what are we actually getting here? And I think that the SEC, as you noted, also started to take notice and started to say, well, we haven’t really seen a token out there that isn’t a security, because they all look like you’re building enterprises to us.
So, I think it’s less that there aren’t like utility tokens that people are still playing with. I mean, you have some no action letters that have come out that would seem to be really pure utility tokens. I think the question has been like the narrative has shifted. The SEC has spoken and people have started to kind of take notice of that and say, okay. Well, we’re going to have to be in a regulated space, which is what many people have been saying for a very long time, but I think sometimes got drowned out in some of the other noise.
Interestingly for a litigator and regulatory enforcement perspective, I’m actually going to take a business case on this one. I think, early on, a lot of people didn’t quite what to do with utility tokens. People would introduce them and say, well, okay, do we actually need this thing? It’s real estate on the blockchain. It’s coffee, but on the blockchain. It’s love, but on the blockchain. And people were struggling with what the business use case was. And some are very compelling and some are not so much. But, when you come at it from the other side, when you look at assets that may already exist and the securitization of those in a digital concept, it’s easier for conservative businesses who are trying to adapt to it to understand, oh, it’s a security, but it’s going to be in a slightly different form. And that may be easier to approach for institutional actors and other bigger businesses than coming at it with an entirely new approach to businesses that were already existing.
So, let’s talk about regulatory strategy and that evolution then. With ICOs, the predominant thought was a very tech one of, we’ll ask for forgiveness later. Whereas for STOs, there’s so much hyper-focus on legal compliance and regulatory compliance that seems to be mother, may I, let’s ask for permission first. So, what are you all seeing in terms of regulatory strategy for both issuers and STO infrastructure players? And is that too conservative?
So Facebook, their original slogan was, move fast and break things. Right? That’s an approach that, as an attorney in advising my clients, I can never support, despite the fact that that approach breeds innovation. So, I think we’re seeing this tension right now between the Silicon Valley model of move fast and break things and what the regulators want to see, which is compliance, disclosure, cooperation, more disclosure and their involvement in the process.
Yeah. I just had this conversation yesterday with someone at SeedInvest and SeedInvest’s motto is move fast and do it right.
Not break things. So, we’ve tried to straddle and get the best of both worlds, though it’s not always possible.
I think we’re in a really interesting time now. We’ve come out of this sort of move fast and break things sort of mindset and we’re moving into a position where people are a little bit more cognizant of when they are in a gray space and when they are in a no fly zone whatsoever. And I think that the best advice I can give people in this current environment is get good advice. Like whether it’s from me as an attorney, whether it’s from somebody else, you have to know how to maneuver within that gray zone and you have to be working with somebody who understands the way regulator thinks. It’s not always a law firm. It can be a platform provider, it can be somebody else. But you need good advice. It can be the Security Token Academy here. The point is, you need to have good advisors and you need to think out your steps, plot it out. And yes, there may be a little bit of an upfront cost to that. But, compared to at the back end and some of the clients that we’re dealing with on the enforcement side, trust me, it’s a great investment now.
Be sure to check out more interviews from our New York city meetup on our website, SecurityTokenAcademy.com. Click on the interviews tab and select the video you’d like to watch.
I want to remind our viewers that, if you have any questions about security tokens, be sure to email us and we could answer them right here on a future episode of Security Token Insight. The address is [email protected] Be sure to include your name with your question. One more time, the address is [email protected] You can also learn more by visiting the frequently asked questions page on our website by clicking on the FAQ tab. You can also find a glossary of helpful terms as well.
Today’s term of the day is transfer agent. Transfer agents are service providers tasked with tracking and managing securities, transfer, and ownership. This includes the ability to issue and cancel changes in ownership, act as an intermediary between an issuer and an asset holder, and handle certificate, theft, destruction, or loss.
All right. That’s it for today’s episode. Be sure to follow us on Twitter, Facebook, Telegram, and Medium. And don’t forget to subscribe to our YouTube page so you don’t miss out on any of our videos or expert interviews. And a big thank you to all of our gold corporate members. We invite you to learn more about our gold corporate members by clicking on the directory tab and click corporate member. I’m Adam Chapnick. For everyone here at the Security Token Academy, thanks so much for watching
You can watch all episodes of Security Token Insight on demand. Visit SecurityTokenAcademy.com, click on the Insight tab, and select Insight Show. It’s just that easy.
SecurityTokenAcademy.com is a platform for information about the new world of Security Tokens. We are not a registered broker-dealer or investment advisor. We are not a Security Token or blockchain platform, nor can you purchase or invest through our website. We do not offer investment or purchase advice; nor do we endorse or recommend purchases or investments in any Security Token, and we don’t tell you if any purchase or investment is suitable for you. Additionally all investments entail risk, and investments in start-ups as well as Security Tokens involve a potentially greater risk.
Copyright © 2020 SecurityTokenAcademy.com®. All Rights Reserved.