Brazil’s Securities Market Regulator Targets Mercado Bitcoin over Token Sale

The Brazilian Securities and Exchange Commission (CVM), the securities market regulator in Brazil, has ordered Mercado Bitcoin, the largest cryptocurrency exchange in Brazil, to provide information on fixed-income tokens the exchange has issued over the last two years.

According to reports by Estadão newspaper, the capital markets regulator wants to know the amount Mercado Bitcoin raised with the tokens and see a list of investors who participated.

While the report did not reveal the names of the tokens, it confirmed that they were issued on a blockchain and allegedly backed by real-world assets. The report further said the tokens were “low risk and high yield” in “consortium, energy, writs of payments and receivables.”

Mercado Bitcoin has responded to the matter, saying that its token sales fully complied with Brazil’s regulatory framework. The exchange further said it “actively” works with the securities market regulator and Brazil’s central bank to “contribute to the construction of regulations for the sector.”

“We do not make public offerings of securities outside the scope of the authorizations we hold as an authorized crowdfunding platform and investment manager,” Mercado said.

In early this month, the CVM banned the Singapore-based crypto exchange Bybit from brokering securities in the country. On September 5, Bybit was booted out of the Brazilian market over its alleged unregistered securities offering. The country’s securities watchdog ordered the Singaporean exchange to cease operations immediately or face a daily fine.

The CVM alleged that Bybit was seeking to raise funds from Brazilian investors for investments in securities without the company having the authorization to act as a securities intermediary. The regulator argued that only Brazil’s stock exchange B3 is allowed to offer securities in the country.

This month, 2TM Group, Mercado Bitcoin’s parent company, criticized Brazilian regulators for not being clear about regulating cryptocurrency. The company said the current environment in Brazil is unfair and has not yet developed a clear regulatory framework for crypto-activities.

Meanwhile, reports indicate that the CVM is preparing to release an official crypto guide soon but encourages companies to consult the commission before issuing any token that may be considered a security.

Image source: Shutterstock


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KuCoin Introduces14th Spotlight Token Sale: IX Swap Project

Cryptocurrency exchange KuCoin has announced the launch of the KuCoin Spotlight enabling its users to start with IX Swap (IXS) and get some IXS tokens. IXS is a native token of IX Swap.

IX Swap is a full-featured DeFi-based Automated Market Maker (AMM) built for Security Token Offerings (STO) and Tokenized Stock Offerings (TSO).

These tools were created fill in the missing gaps in the infrastructure needed to bring about the resurgence of STOs amid traditional processes, such as security tokens and tokenized stocks, having massive potential.

IX Swap IEO Is Available on KuCoin Exchange

The project plays a role as the connection of DeFi and CeFi to look for solutions in bringing much-needed liquidity to the STO market. With the addition of borrowing and lending capabilities and market making, it will help to accelerate the development of interest in the DeFi as well as the use of tokenized assets.

IX Swap offers Automated Market Maker (AMM) functions and other liquidity pools to bring liquidity to the STO space. IX Swap will offer two types of liquidity pools, including one is for custodial assets (STO and TSO) and another is for non-custodial assets (cryptocurrencies).

For custodial assets, there’s a third-party licensed custodian that will oversee the process and ensure all necessary rules are followed. For non-custodial assets, users are enabled to be able to stake their tokens to provide liquidity and receive a share of the fees.

Borrowing and lending for idle assets will be handled on IX Swap. The borrowed amount will be a percentage of the asset’s current market value and lenders will receive the full amount plus interest back that is similar to traditional markets through a smart contract, which releases the collateral once the loan is paid back.

In addition to providing impermanent loss insurance by 8% of funds allocated for the ecosystem to the IL insurance fund, the project will charge 5% of trading fees, as well as 50% of all penalties for early termination of liquidity provision.

What Is the IXS token?

IXS is the native currency for IX Swap and is distributed as incentive rewards to ecosystem contributors aiming to keep them to continue engaging with the platform.

IXS paired pools not only will have raised returns over non-IXS paired pools but they have also added an impermanent loss mitigation feature in place.

It is required to use the token for on-chain governance capabilities in the management and implementation of changes unless the token will be the native payment token on the InvestaX CEX Platform.

Do STOs and TSOs Have the Potential to Replace the Existing System?

Considered to have massive potential when compared to the traditional securities systems, the IX Swap platform is looking to make a splash in the industry by bringing users’ interest back into the decentralized security tokens and stock scene through liquidity and other functions.

The foundation of knowledge is building it on is very solid. IX Swap was developed by a team of three well-experienced professionals, including Alice Chen, Aaron Ong, and Jules Kwan.

Alice Chen has previously worked at major international firms and she has brought over 17 years of corporate and legal experience to found IX Swap.

Before entering the cryptocurrency industry, Aaron Ong has over 8 years of capital market and investment advisory experience at top-tier banks playing as an advisor and investor across all asset classes.

During his 20-year career, co-founder Jules Kwan has founded 6 companies including in the blockchain space. He has many years of knowledge with security tokens and builds platforms for the digital world.

Although security tokens and tokenized stocks currently represent a fraction of the total private capital market, STOs and TSOs are expected to bring huge benefits over traditional processes.

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CoinList ‘Rally’: 40K investors rush to buy RLY despite price pump

Social token platform Rally has completed its first “liquid token sale” on crypto asset issuance platform CoinList, with 40,000 investors snapping up RLY tokens for $0.60 each between April 1 and April 4.

The sale saw tokens distributed to investors at a set price despite RLY trading on exchanges since October, 2020. Token pricing was determined by a 20-day trailing average from March 11, 2021 to March 30, 2021 minus a 30% markdown to compensate for the RLY being locked up for 12-month a linear release.

However, investors had the opportunity to purchase RLY for less than half the price offered by CoinList on the open markets just five weeks ago.

The sale was approved through community governance in mid-March, with the 40 million RLY sodl having previously been allocated to Rally’s Community Treasury. The ballot saw 100% of the 7,400 participating token holders vote in favor of the sale. Nearly 30% of RLY are now held by Rally’s team and investors.

News of the sale appeared to drive bullish momentum for RLY, which has gained nearly 250% since trading for less than $0.29 on March 12. RLY consistently traded between $0.25 and $0.35 from mid-January until mid-May. As of this writing, RLY last changed hands for $1.

RLY/USD: CoinGecko

Half of the tokens will become tradable on Oct. 4, after which the remaining RLY will unlock gradually on a monthly basis. In a blog post on April 12, Coinlist revealed the offering generated $22 million. Investments were limited to $1,000 per person, with nearly two-thirds of the offering’s 115,000 registrants missing out on participating.

Rally is a blockchain-based social network that allows content creators to launch social tokens.

The social token sector — non-fungible tokens issued by content creators, brands, and communities — has been on the rise in 2021, with RLY and WHALE representing 83% of the social token market cap pack with $240 million combined.