Security tokens are expected to become a new tool to release the value of the assets. Michael Wong, the first partner of the blockchain fund MaiCapital, who obtained the license of the Securities and Futures Commission (SFC), said the company would study the relevant investment during an interview with CoinsNetwork. It is also expected to improve the current situation in the cryptocurrency market.
Wong said that MaiCapital is focusing on managing crypto assets and security tokens will be an interesting wave being taken very seriously. He believes that there is real-world asset support behind these tokens, which makes the tokens more legitimate and they can take advantage of the benefits of the underlying blockchain technology, which is expected to attract people who have not participated in cryptocurrencies or related investment in the past.
When the cryptocurrency market changed from bullish to bearish, many people who invested in Initial Coin Offering (ICO) projects were overwhelmed and the market sentiment was low. However, Wong believes that Security Token Offering (STO) may help improve the situation. Because ICO itself is speculative, the market has very low confidence in products after encountering setbacks. As for STO, it is expected to increase confidence and encourage investors to reconsider the field of cryptographic assets.
The current state of the cryptocurrency market has rumblings of ‘ICO is dead’. Wong said, ‘I actually don’t think ICOs would die.’ He explained that ICO, STO, and even IPO are all the same in principle. The financing tools of the asset class are only attributes. If you really want to enter the entire public market, “I think they will coexist.”
He further pointed out that if you want to raise funds in the form of IPO, the time and capital required are obviously more; STO requires relatively less time and capital, but there are restrictions on sales targets; and ICO is the other extreme, except their own advantages, when people are more confident with STO, the favourability of ICO will return, but it may not reach previous level. When relevant regulations are introduced, it will reduce the chance of fraud, so it is considered as one of the legitimate fund-raising tools.
Wong has set up another company called MaiBlocks, which uses blockchain technology to build an end-to-end real estate securitization platform. MaiBlocks, in partnership with MaiCapital and Treasure Capital Asia, hopes to bring a new form of financing to homeowners and real estate developers, as well as provide investors with new ways to invest.
He also revealed that Taiwan’s blockchain technology company Amis is one of MaiBlocks’ investors. AMIS and HTC work closely together to enable HTC’s blockchain cellular devices to utilize chips to create secure storage and cryptocurrency wallets. AMIS announced last year that investment bank J.P. Morgan’s Ethereum blockchain platform ‘Quorum’ adopted the AMIS consensus algorithm.
In early November, SFC included crypto asset portfolio management companies and crypto-equity fund distributors in the scope of supervision. Wong thinks this is a positive news to the market. For MaiCapital, who holds the relevant license, he believes the clearer guidance as a positive influence.
He pointed out that the SFC are increasing focus on the cryptocurrency industry. In addition to letting people know that SFC is regulating the crypto space, it also gives the industry a clearer direction on how to operate. From an investor perspective, this will welcome more participants to the entire ecosystem and more institutional investors may consider cryptocurrency as one of the asset classes.
Michael Wong will participate at the ‘Hong Kong Blockchain Summit 2018’ organised by CoinsNetwork, Bloomberg Businessweek/Chinese Edition and Hong Kong blockchain consultant and investment company BlackHorse Group on December 12 this year. He will share more about STO along with other renowned speakers at the conference to share the latest trends in the blockchain industry.