Malta to Propose ICO Definition Test

The proposed test will help to find out if the ICO's token is a security or utility token
16 April 2018   1538

The authorities of Malta have submitted a test that will clearly determine when a token issued through ICO is considered a security. This is reported by CoinDesk.

The Financial Services Authority of Malta published a consultation document and now accepts public comments on its contents. The document describes the so-called Financial Instrument Test, which would ultimately become part of its proposed Virtual Financial Asset Act (VFAA).

The agency reported that the methodology of the test is based on a discussion of a previous document published in November 2017, when this idea was presented for the first time.

The test includes 3 stages, which first of all will determine whether an asset based on distributed registry technology (DLT) can be classified as "virtual tokens" or utility-tokens that are not securities.

Virtual token is a DLT asset which has no utility, value or application outside of the DLT platform on which it was issued and that cannot be exchanged for funds on such platform or with the issuer of such DLT asset.
 

The Financial Services Authority of Malta proposal document

Tokens that belong to this category will not be regulated by the law "On virtual financial assets".

Assets that are traded on the secondary market will pass to the second stage of testing, where the token will be checked for compliance with various definitions of the security in European legislation, including tradable securities, money market instruments or financial derivatives.

If it turns out that the token corresponds to the definition of one of these assets, it will be regulated in accordance with the EU directive "On the markets of financial instruments".

A negative result in the second stage will allow the token to be admitted to the third stage of testing, at which the issue of token regulation will be decided in accordance with the Law on Virtual Financial Assets. At this stage, both the pan-European and the national criteria of Malta will be presented.

Proposed to cover all ICOs organized in Malta, the paper is currently open for public input until May 5, the agency said.

Bitfinex's LEO Token Whitpaper to be Released

Public stage of tokensale may not be conducted if hardcap of $1B won't be reached during closed sale
08 May 2019   276

Bitfinex Cryptocurrency Exchange published the whitepaper LEO token, with which it intends to raise $ 1 billion during the initial exchange offering (IEO).

It is expected that this amount will allow to fill the previously formed deficit of $ 850 million - the site operator will redeem tokens monthly for an amount of 27% of the profits.

Private stage of tokensale ends on May 11. If the intended hardcap won't be reached by this time, Bitfinex may refuse the public part of the campaign.

If fewer than 1 billion USDt tokens are sold by private token sale, the Issuer may thereafter sell remaining tokens at times and in a manner it deems appropriate in its sole discretion, consistent with applicable law. 
 

LEO Whitepaper

The issuer of the LEO token is Unus Sed Leo Limited, the newly registered IEO-iFinex platform.

The document also says that iFinex, which will be launched in June, will actively participate in the development of the second-tier Lightning Network.

iFinex has joined with a number of other companies and individuals to help develop and finalize the support for digital assets on Lightning Network. Ideally, digital assets developed and introduced by iFinex, including the LEO token, will be among the first digital assets launched on the Lighting Network.
 

LEO Whitepaper

In addition, Bitfinex plans to create a “a licensed and regulated security tokens exchange”, launch a derivative product with security at USDT and leverage up to 100x, as well as the Dazaar Big Data Marketplace and Betfinex exchange rates.

Another project will be the modular set of tools, libraries and protocols μFinex, based on the principles of open source. It will be used in both exchange and derivative products.

It worth reminding that in late April, the Attorney General’s Office of New York reported receiving a court order against Bitfinex in connection with the alleged loss of the last $ 850 million and the concealment of this fact from market participants.

Representatives of the trading platform said that we are not talking about permanent loss. These funds are frozen in bank accounts of Panamanian processing Crypto Capital Corp., located in four countries.

To ensure liquidity, Bitfinex was forced to use Tether Limited's funds for a loan and, according to the AG’s Office, has already received $ 750 million from the company's reserves. This was considered by the department as a crime.

On May 7, the New York State Supreme Court upheld the injunction against the Bitfinex Bitcoin Exchange, which does not allow Tether Limited to use its reserves for Exchange lending and other investment activities.