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Consider a cryptobond an ICO on steroids. They are more attractive to buyers because with an ICO all you get is the hope that the particular token will survive and gain value. A cryptobond issuer, on the other hand, promises you certain return plus all the perks of an ICO if the underlying token appreciates.
As an issuer, you can denominate your bond in a major crypto and must then make sure you will be able to repay it even if the crypto (BTC, ETH, etc.) goes through the roof in the future. Or, denominate it in your own token and make sure it gains value over time.
Another option is to appoint us your trustee in which case your bond is denominated in our tokens ORIG & OBITER. Buyers will buy O&O from us with a major crypto or fiat, we then gradually release payments to you and manage your repayments to buyers in O&O. As a guarantee we set aside the full issue amount which can be publicly inspected on blockchain. Buyers can resell O&O at any time at the DEX. Not only they gain from your bond but also from O&O's value appreciation as O&O has a finite amount, was never devalued by an airdrop or other giveaway and will be in demand by buyers for the purchases of other cryptobond issues.
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Untrue
Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II.
So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law;
Whom is in charge of the MIFID?
What FCA number or what MIFID exemption?
Who is the KYC/AML officer?
What is your FACTA compliance procedure?
How about your GDPR comptroller?
This is what I meant. And to what extent is the government actually going to get involved in these issues if Bitcoin is still in the legal grey zone? I personally like the idea of a bond because it's guaranteed, but I'm having a hard time imagining who will enforce these laws if push comes to shove. Are they actually going to give it court time? Do they really want to sit and argue over (what they may claim to be) bits and bytes that are perceived value? At this stage in Bitcoin's development I am a bit hesitant to believe that a truly guaranteed bond could be created. I guess the terminology has not fully settled yet but the word cryptobond will probably end up somewhere at the level of the terms eurobond, bulldog, yankee, samurai etc. - none of them having a precise definition of particular instruments. I look into the substance and follow the model of a fiat note as a promise to repay borrowed funds, which is always the same no matter what the form is (physical/digital). The denomination, on the other hand, matters to me to distinguish between un- and regulated activities. |
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unregistered bitcoin-denominated securities exchange, though a cryptobond denominated in your own coin sounds just like a SAFT, so not really new. If registered, whats your FCS number? What is the name of the officer in charge of your MiFid compliance? How are you preventing US citizens from joining? Please have a look at the relevant legal framework in the links stated above, so that we talk on the same terms / jurisdiction and discuss relevant questions. I'm talking about UK framework too. Yes the earlier poster, was cosnidering from a USA standpoint, so there is a diffrence there. That was a typo, it is a FCA number (as UK competent MIfid Authority) or MifId exemption I'm looking to find.
And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond?
IANL, but believe it is to do with a specific legal meaning of the word bond in the UK context. The issuing jurisdiction might require usage of that term over say promissory note. Of course equally it could be if the word just mean spromise, you can say I'm just making a promise(although that might be a bond like an IOU) How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?
If it is issued in accordance with UK law, then the British version of the SEC. The SEC is unlikely to get involved in British offerings to non US citizens/residents. How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well? How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?
And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond? Is it registered out in the Indian Ocean territories or something? Or could it also be that "bond" is just a nice term that makes people feel more secure, and there is no legal backing behind the security?
It's hard to know with these things with all of the legal issues and stuff.
There is an excellent resource to give you a definition of a bond and its lifetime process, stated in a previous post. It is easy to look up online as well. Just please make sure you are researching English bonds/notes, so that we speak on the same terms. As it is an obligation to return borrowed funds, it is enforceable under English law in any court that recognises it, on the other hand, cryptocurrencies are unregulated in the UK so cryptobonds issuance is not a regulated activity. It does involve a significant amount of legal matters though and there is legal risk involved in the sense that cryptobonds may be banned at any time (meaning an abrupt end) or declared regulated activities, which would simply mean they would fall within the FCA regulatory perimeter. Therefore we do not expect such a proliferation of fraudulent issues as with ICOs.
Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II. So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law; Whom is in charge of the MIFID? What FCA number or what MIFID exemption? Who is the KYC/AML officer? What is your FACTA compliance procedure? How about your GDPR comptroller? There are numerous bond types but I am not in the position to offer couching on basic terminology, so I would again refer to these excellent resources: http://wildy.com/isbn/9781912363100/clp-legal-practice-guides-banking-and-capital-markets-2018-paperback-a4-college-of-law-publishinghttp://wildy.com/isbn/9780414031364/the-law-and-regulation-of-finance-2nd-ed-hardback-sweet-maxwell-ltdhttp://wildy.com/isbn/9780414027640/the-law-of-finance-2nd-ed-paperback-sweet-maxwell-ltdThe FCA names which financial derivatives ARE regulated and which are CAPABLE OF BEING regulated activities. At the end of the day it is the courts that have the final say on that. We contend that cryptobonds are not regulated activities and are prepared to argue that position before court. We would preferably recommend a syndicate distribution of the issue in question rather than a retail bond. The FCA list is non exhaustive, there's still a requirement to list a prospectus or the number of the exemption your using in your offering, even if it is an unregulated exempt offering, that has to be declared too. Your legal counsel will be in a portion to answer my basic questions (in fact quite possibly required and compielled to do so)
Untrue
Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II.
So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law;
Whom is in charge of the MIFID?
What FCA number or what MIFID exemption?
Who is the KYC/AML officer?
What is your FACTA compliance procedure?
How about your GDPR comptroller?
This is what I meant. And to what extent is the government actually going to get involved in these issues if Bitcoin is still in the legal grey zone? I personally like the idea of a bond because it's guaranteed, but I'm having a hard time imagining who will enforce these laws if push comes to shove. Are they actually going to give it court time? Do they really want to sit and argue over (what they may claim to be) bits and bytes that are perceived value? At this stage in Bitcoin's development I am a bit hesitant to believe that a truly guaranteed bond could be created. Actually the idea of a truly guaranteed Bitcoin bond doesnt seem thag far out of grey. Eu countries routinely issue security bonds in other currinces. If the jurisdiction considers Bitcoin to simply be another currency, then a properly regulated MiFid and prospectus compliant conventional bond denominated in bitcoin seems functionally the same as an EU company issuing a dollar bond. Of course there is no crypto issuing,trading is in terms of the white legal framework of bond issuing. Bond payments would be in btc and the sale price would be in btc though. Assuming crypto/tokens were regulated under English law, the questions asked above would be perfectly legitimate. However, English law does not regulate them. Cryptobonds are "capable of being" regulated, that does not mean they are though. In any case we would recommend anyone considering joining our syndicate or appointing us as the lead manager for their issue to do their own legal research and/or seek legal advice. We would calculate the total cost of the issue as follows: Issue amount £2M in crypto: 5% £100M: 0.37% The cost would decrease from 5% to 0.37% in a linear manner with increasing issue amount. For issues below £2M there would be a fixed total cost of £100k, for issues over £100M the cost would be further discounted on an individual basis. We would accept fiat and/or crypto. The calculation would be based on pricing of fiat bond issues as a starting point which we will adhere to wherever possible. In addition, there may be third party costs such as exchange listing fees or rating fees, for instance; these will need to be clarified if/when such services become available and you decide to use them. The issue costs would be deducted from the funds raised; a mandate deposit 5% of the total estimated issue cost will apply if you instruct us to lead-manage the issue. This may be spread over instalments. Fiat Eurobond issues usually take about six weeks. Your issue might require more time as this is a novel way of raising funds but I will be happy to prepare a mandate letter at your nearest convenience. |
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unregistered bitcoin-denominated securities exchange, though a cryptobond denominated in your own coin sounds just like a SAFT, so not really new. If registered, whats your FCS number? What is the name of the officer in charge of your MiFid compliance? How are you preventing US citizens from joining? Please have a look at the relevant legal framework in the links stated above, so that we talk on the same terms / jurisdiction and discuss relevant questions. I'm talking about UK framework too. Yes the earlier poster, was cosnidering from a USA standpoint, so there is a diffrence there. That was a typo, it is a FCA number (as UK competent MIfid Authority) or MifId exemption I'm looking to find.
And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond?
IANL, but believe it is to do with a specific legal meaning of the word bond in the UK context. The issuing jurisdiction might require usage of that term over say promissory note. Of course equally it could be if the word just mean spromise, you can say I'm just making a promise(although that might be a bond like an IOU) How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?
If it is issued in accordance with UK law, then the British version of the SEC. The SEC is unlikely to get involved in British offerings to non US citizens/residents. How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well? How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?
And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond? Is it registered out in the Indian Ocean territories or something? Or could it also be that "bond" is just a nice term that makes people feel more secure, and there is no legal backing behind the security?
It's hard to know with these things with all of the legal issues and stuff.
There is an excellent resource to give you a definition of a bond and its lifetime process, stated in a previous post. It is easy to look up online as well. Just please make sure you are researching English bonds/notes, so that we speak on the same terms. As it is an obligation to return borrowed funds, it is enforceable under English law in any court that recognises it, on the other hand, cryptocurrencies are unregulated in the UK so cryptobonds issuance is not a regulated activity. It does involve a significant amount of legal matters though and there is legal risk involved in the sense that cryptobonds may be banned at any time (meaning an abrupt end) or declared regulated activities, which would simply mean they would fall within the FCA regulatory perimeter. Therefore we do not expect such a proliferation of fraudulent issues as with ICOs.
Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although we do not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II. So, bonds can be derivatives as can ICOs plus there is securities law too, if issued in accordance with UK law; Whom is in charge of the MIFID? What FCA number or what MIFID exemption? Who is the KYC/AML officer? What is your FACTA compliance procedure? How about your GDPR comptroller? There are numerous bond types but I am not in the position to offer couching on basic terminology, so I would again refer to these excellent resources: http://wildy.com/isbn/9781912363100/clp-legal-practice-guides-banking-and-capital-markets-2018-paperback-a4-college-of-law-publishinghttp://wildy.com/isbn/9780414031364/the-law-and-regulation-of-finance-2nd-ed-hardback-sweet-maxwell-ltdhttp://wildy.com/isbn/9780414027640/the-law-of-finance-2nd-ed-paperback-sweet-maxwell-ltdThe FCA names which financial derivatives ARE regulated and which are CAPABLE OF BEING regulated activities. At the end of the day it is the courts that have the final say on that. We contend that cryptobonds are not regulated activities and are prepared to argue that position before court. We would preferably recommend a syndicate distribution of the issue in question rather than a retail bond. |
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How are disputes settled? Who is the arbiter that determines where the money goes in case of missing payments as well?
And considering legal issues with regional law, as the other posters so kindly brought to our attention, how could this be realistically determined to be a bond? Is it registered out in the Indian Ocean territories or something? Or could it also be that "bond" is just a nice term that makes people feel more secure, and there is no legal backing behind the security?
It's hard to know with these things with all of the legal issues and stuff.
There is an excellent resource to give you a definition of a bond and its lifetime process, stated in a previous post. It is easy to look up online as well. Just please make sure you are researching English bonds/notes, so that we speak on the same terms. As it is an obligation to return borrowed funds, it is enforceable under English law in any court that recognises it, on the other hand, cryptocurrencies are unregulated in the UK so cryptobonds issuance is not a regulated activity. It does involve a significant amount of legal matters though and there is legal risk involved in the sense that cryptobonds may be banned at any time (meaning an abrupt end) or declared regulated activities, which would simply mean they would fall within the FCA regulatory perimeter. Therefore we do not expect such a proliferation of fraudulent issues as with ICOs. |
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unregistered bitcoin-denominated securities exchange, though a cryptobond denominated in your own coin sounds just like a SAFT, so not really new. If registered, whats your FCS number? What is the name of the officer in charge of your MiFid compliance? How are you preventing US citizens from joining? Please have a look at the relevant legal framework in the links stated above, so that we talk on the same terms / jurisdiction and discuss relevant questions. |
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Saw this on the subforum text and was curious.
How is a crypto bond/stock different/better or worse than an ICO token? Would you buy a crypto bond? Would you want repayent in BTC (or at leats denoinaed in BTC/Your Favorited crypto) Have you brought or sold one? If so why/why not?
What about SAFT/SAFEs and convertible bonds?
This is an interesting concept to preserve investors fund. But my questions are:
1. How do you preserve investors fund peradventure the ICO is a scam?
2. What yardstick do you use in vetting the legitimacy of the ICO you stand in for?
Cryptobonds issuers are subject to detailed scrutiny. Due diligence is carried out as in fiat bond issuance process. Also, we may act as trustees for the bond, that is, we guarantee repayment in the case of default. For that purpose we set aside the full amount of the issue; it is on blockchain so visible to anyone. We charge premium to the issuer for taking that risk. There is no rating agency in place as of yet, so the underwriting syndicate will carefully examine the issuer. This is similar to ICO pre sales. Imagine you are a member of the syndicate, asked to commit yourself to purchase a large block of bonds. You want to be sure they are redeemable or resaleable so you will ask the issuer important questions. Bondholders will be able to hedge their positions by purchasing cryptoswaps, i.e. insurance on default of the bonds. The FCA's position on crypto derivatives is at https://www.fca.org.uk/news/statements/cryptocurrency-derivatives and bonds particularly are mentioned in https://www.fca.org.uk/publication/feedback/fs17-04.pdf . We will follow the issuance process as specified by the https://www.fca.org.uk/markets/ukla wherever applicable. Examples of a substantial fiat bond documentation are available at https://marketsecurities.fca.org.uk/ and for an informative overview of UK bonds, an excellent resource is https://www.wildy.com/isbn/9781912363100/clp-legal-practice-guides-banking-and-capital-markets-2018-paperback-a4-college-of-law-publishing . I propose to issue bonds on https://counterparty.io/ like e.g. https://xchain.io/address/1Pg37Kbjfs7uw4ifZtU7rbHNPWFjMhYowk or other platform if more suitable. Bond terms will need to be decided: - how to supplement for a credit rating (no rating agency in place as of yet) - the amount - return on investment - when redeemable - bondholders' rights in the case of default We are happy to help issuers with the specification of their requirements. As to our remuneration, it will be in principle based on a combination of fees and commissions and I propose to finalise it together with the issuers. |
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Saw this on the subforum text and was curious.
How is a crypto bond/stock different/better or worse than an ICO token? Would you buy a crypto bond? Would you want repayent in BTC (or at leats denoinaed in BTC/Your Favorited crypto) Have you brought or sold one? If so why/why not?
What about SAFT/SAFEs and convertible bonds?
Issuing cryptobonds is a new way of raising funds for your project. In an ICO, token buyers believe in the future rise of your token's value. That is all they get. Many token buyers have been disappointed by failures of most ICOs and now they prefer the advantages of fixed income from cryptobonds. By issuing a cryptobond you promise to repay bondholders the funds they paid you for the bonds at some point in the future. The cryptobond is denominated in a major cryptocurrency or in your token so if your token's value rises then the bondholders benefit from the appreciation as well as from interest that you pay for the bond. |
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This is an interesting concept to preserve investors fund. But my questions are:
1. How do you preserve investors fund peradventure the ICO is a scam?
2. What yardstick do you use in vetting the legitimacy of the ICO you stand in for?
Cryptobonds issuers are subject to detailed scrutiny. Due diligence is carried out as in fiat bond issuance process. Also, we may act as trustees for the bond, that is, we guarantee repayment in the case of default. For that purpose we set aside the full amount of the issue; it is on blockchain so visible to anyone. We charge premium to the issuer for taking that risk. There is no rating agency in place as of yet, so the underwriting syndicate will carefully examine the issuer. This is similar to ICO pre sales. Imagine you are a member of the syndicate, asked to commit yourself to purchase a large block of bonds. You want to be sure they are redeemable or resaleable so you will ask the issuer important questions. Bondholders will be able to hedge their positions by purchasing cryptoswaps, i.e. insurance on default of the bonds. The FCA's position on crypto derivatives is at https://www.fca.org.uk/news/statements/cryptocurrency-derivatives and bonds particularly are mentioned in https://www.fca.org.uk/publication/feedback/fs17-04.pdf . We will follow the issuance process as specified by the https://www.fca.org.uk/markets/ukla wherever applicable. Examples of a substantial fiat bond documentation are available at https://marketsecurities.fca.org.uk/ and for an informative overview of UK bonds, an excellent resource is https://www.wildy.com/isbn/9781912363100/clp-legal-practice-guides-banking-and-capital-markets-2018-paperback-a4-college-of-law-publishing . I propose to issue bonds on https://counterparty.io/ like e.g. https://xchain.io/address/1Pg37Kbjfs7uw4ifZtU7rbHNPWFjMhYowk or other platform if more suitable. Bond terms will need to be decided: - how to supplement for a credit rating (no rating agency in place as of yet) - the amount - return on investment - when redeemable - bondholders' rights in the case of default We are happy to help issuers with the specification of their requirements. As to our remuneration, it will be in principle based on a combination of fees and commissions and I propose to finalise it together with the issuers. |
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Seeking to raise funds via issuing a crypto bond? We can assist. PM for details.
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Seeking to raise funds via issuing a crypto bond? We can assist. PM for details.
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Seeking to raise funds via issuing a crypto bond? We can assist. PM for details.
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Introducing ORIG & OBITER denominated 3-year medium term discount note. Brokers, dealers and syndicate members wanted. Lucrative commissions paid. More at LegalMachinery.com or PM.
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Introducing ORIG & OBITER denominated 5 year fixed rate bond with 4% interest paid in BTC/ETH. Brokers, dealers and syndicate members wanted. Generous commissions paid. More at LegalMachinery.com or PM.
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