Market Analysis Report (02 Nov 2017)

New Zealand Regulator: Cryptocurrencies Are Securities

In a statement published last week, the New Zealand Financial Markets Authority (FMA) outlined the ways in which token sales would be covered under the national law. Notably, the regulator said that, in its view, any cryptocurrency or ICO-derived token would be considered a security. The FMA stated:

“All tokens or cryptocurrencies are securities under the [Financial Markets Conduct Act 2013] – even those that are not financial products. A security is any arrangement or facility that has, or is intended to have, the effect of a person making an investment or managing a financial risk.”

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Vitalik Unveils Vision for Ethereum –  Emphasis on the Scalability Problems

At Ethereum’s flagship conference, Devcon, project creator Vitalik Buterin revealed he has been quietly working on a new long-term plan for the future of the blockchain network. The roadmap hints at problems yet to be solved on the platform, and emphasise the scalability problems for project developers. As Ethereum nodes need to store everything that ever happened on the network, Buterin stressed that there’s a need for solutions that mitigate expensive storage costs that could escalate exponentially as the system expands.

“The amount of activity on the blockchain is orders of magnitude larger than it was just a couple of years ago. Scalability is probably problem number one. There’s a graveyard of systems that claim to solve the scalability problem but don’t. It’s a very significant and hard challenge. These are just known facts.”

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SEC: Celebrity ICO Endorsements Could Be Illegal

The U.S. Securities and Exchange Commission (SEC), which released a wide-ranging statement on the blockchain use case in late July, said yesterday that celebrities who endorse token sales may run afoul of “anti-touting” laws if they don’t correctly state what compensation, if any, they may have received. The agency stated:

“Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments. These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”

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