Polymath and BnkToTheFuture partner for asset tokenisation
BnkToTheFuture plans to tokenise blockchain assets via Polymath, with potentially far-reaching benefits.
BnkToTheFuture (pre-ICO) has signed a partnership with Polymath to help tokenise assets for compliant trading.
- BnkToTheFuture (BTF): A transparent platform that performs due diligence on traders who sign up to get into the BTF pipeline and offers equity, ICO tokens and other opportunities to appropriate traders at discounted rates.
- Polymath: An open source platform with built-in know-your-customer features, for the transparent tokenisation of securities and the more efficient purchasing of cryptocurrency. It aims to create a global securities token standard, the "ST20." The Polymath protocol gives token issuers the ability to restrict transfer and ownership of security tokens based on KYC and accredited status for flexible compliance in line with a range of international standards.
What it means
Cryptocurrencies need to deal with different global regulations. For example, a startup might find itself simultaneously having to deal with the following:
- Freely accepting any currency from traders in some countries
- Accepting any currency, but only from identifiable and verified traders, in other countries
- Accepting cryptocurrencies only, or fiat currencies only, in some countries
- Only accepting select currencies from accredited traders who meet certain standards, with the exact standards varying depending on the trader's country
As you can imagine, this is an almost impossible headache.
Rather than actually trying to navigate this web, many ICOs and startups will instead either ignore the regulations and take their chances outside the law (perhaps inadvertently enabling money laundering or funding criminal activities), or will simply lay blanket bans on traders from certain countries. This is why you'll often see ICOs and other opportunities restricted to residents of certain countries only or off-limits to a list of countries.
This means people can't freely trade around the world, startups need to set aside big legal budgets and it offers an unfortunate incentive to ignore the laws entirely, which might inadvertently give a competitive advantage to scams over legitimate ICOs.
- Polymath aims to create a blockchain system to almost automatically sort through this complex problem and give startups the control they need to manage it all and stay legal. Existing projects can also move to the blockchain on Polymath to enjoy similar benefits. In simple terms, projects move to the Polymath blockchain and get these benefits through the "tokenisation" process.
- BnkToTheFuture is essentially a platform that collects and lists opportunities, and offers them at a discount. Being able to do this through Polymath could let them offer a wider variety of options to more people in more places.
"Through the vision and leadership of its founders, BnkToTheFuture has carved out an important niche in the investment marketplace space," said Polymath CEO Trevor Koverko. "We’re excited for this partnership that will allow us to work shoulder-to-shoulder on introducing the pipeline of projects that choose to launch on Polymath to BnkToTheFuture's thousands of accredited investors."
Essentially, Polymath aims to be able to pitch the projects that launch on its platform to a much wider range of traders, through the existing BTF userbase. The company hopes with will give new projects a reason to launch on the Polymath platform. Polymath will not be launching an ICO, but will instead simply start trading the system's native POLY token.
"A partnership with Polymath will allow us to tokenise a portion of our existing portfolio of Bitcoin, blockchain and FinTech companies, ensuring our investors have easier access to liquidity through our compliance-driven and blockchain-based secondary market trading platform built with securities laws in mind," said BnkToTheFuture CEO and co-founder Simon Dixon.
BTF aims to tokenise a portion of its existing portfolio on Polymath. BnkToTheFuture recently raised an initial US$30 million for its tokenised equity market and due diligence platform, and will open its public token sale on February 6, 2018.
The big picture
It's also worth noting that the benefits of improved compliance can swing in almost any direction. One of which is against scams. Around 10 cents per dollar spent on ICOs is stolen, and people have been losing money to fraud since the invention of money.
You will need to consider whether Polymath's intention to create an international securities token standard might present a long-term solution for ICO and other fraud.
With new coin regulations rolling out around Australia, crackdowns on anonymous trading, and a harsh spotlight on other ICO verification systems, you will need to decide whether Polymath's built-in verification systems and controls will help solve the problem.