Thursday, July 27, 2017

With the SEC labeling ICO's as securities, Wall Street bankers jumping on board this new Wild Wild West of investment

A few days ago the SEC came out with a new ruling that stated that ICO's (Initial Coin Offerings), are to be regulated as securities and not as a virtual currency.  And this move is appearing to come as more and more startup businesses are using the ICO model for capital investment over the more traditional forms of IPOs (Initial Public Offerings) and venture capital.

So with this new regulation in place, and bankers and investors looking desperately for new assets to put their money into, it should come as nor surprise that Wall Street is suddenly going full bore into ICOs, with one hedge fund now backing 20 different startups using this platform.

Richard Liu, a former dealmaker at Renaissance China, left the world of finance for the told Bloomberg he left the banking world behind for the chance to climb aboard a “rocket ship” – in reality a $50 million hedge fund that’s invested in 20 ICOs this year, including Tezos, one of the most successful ICOs in the industry’s brief history. 
“For Liu, who put together some of China’s biggest tech deals in his old job, the chance to shape the nascent arena outweighs the dangers of a market crash or crackdown. Loosely akin to IPOs, ICOs have raised millions from investors hoping to get in early on the next bitcoin or ether, and their unchecked growth over the past year is such that they’ve drawn comparisons to the first ill-fated dot-com boom. Yet with stratospheric bonuses largely a thing of the past, the allure of an incandescent new arena far from financial red-tape has proven irresistible to some. 
‘Traditional investment banks and VCs need to monitor this space closely, it could become very big,’ said the 30-year-old partner at $50 million hedge fund FBG Capital, which has backed about 20 ICOs. He’s off to a quick start, getting in on this year’s largest sale: Tezos, a smart contracts platform that raised $200 million to outstrip the average Hong Kong IPO size this year of around $31 million. 
‘Unlike the traditional financial sector, there are no ceilings or barriers. There’s so much to imagine,’ he said.’ - Zerohedge
Welcome to the new Wild Wild West of Wall Street on the blockchain.


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