Targeting the Main Market would seem ambitious for a young firm working with blockchain, as it is generally reserved for larger companies with a proven track record, and sets a higher threshold of requirements for listing. Smaller and newer firms more often attempt to float on the AIM market.
A firm that’s developed tech to resolve disputes arising from blockchain smart contracts has said it plans to list on the London Stock Exchange.
As reported Friday by Alliance News (via London South East), The Proof of Trust aims to float on the LSE’s Main Market.
“We at The Proof of Trust are excited at the prospect of a full listing on the main market of the company’s shares and we look forward to providing investors with the opportunity to share in this groundbreaking project,” said lawyer and Proof of Trust CEO Dean Armstrong.
CoinDesk has reached out to the company for more details on the planned listing.
Proof of Trust says on its website that it’s built a protocol using distributed consensus to “manage arbitration or dispute resolution for smart contracts.”
Its “anti-collusion algorithm” is said to validate the authenticity of data with “trusted and verified experts” before it is recorded on the blockchain and used to execute smart contracts.
In October 2019, the firm partnered with IBM Blockchain, which said the solution may ultimately be deployed across IBM Cloud, Redhat Openshift, Azure and AWS.
Blockchain Association Tries to Draw Legal Line Between Kik’s Token and Its 2017 Pre-Sale
The Blockchain Association has filed a “friend-of-the-court” brief in the ongoing legal case between the U.S. Securities and Exchange Commission (SEC) and messaging startup Kik, arguing the firm’s kin token is not a security.
The advocacy group argues that the SEC is wrongfully conflating Kik’s 2017 exempt offering of securities to accredited investors with the issuance of blockchain tokens in its brief, filed Friday.
Rather, Kik arranged its token sale in two parts: a private SAFT (Simple Agreement for Future Tokens) and a public token sale, the association wrote in the blog post announcing the move. For the SAFT, Kik filed for a Reg D exemption.
The brief cites SEC Commissioner Hester Pierce, who wrote in her “safe haven” proposal that “conflating the two concepts of the investment contract and the underlying asset has limited secondary trading and has had disastrous consequences for the ability of token networks to become functional.”
“The Blockchain Association is troubled that the SEC’s recent arguments have conflated entering into a contract with accredited investors under a well-established exemption with other events involving the sale or distribution of tokens to the public,” the association’s executive director, Kristin Smith, told CoinDesk.
“In consistent statements, the SEC’s leadership, including Bill Hinman and Jay Clayton, had previously made clear that something that is a security at one point in time can later become a non-security – for example, when a network is sufficiently decentralized or fully functional,” she said.
SAFTs go to court
The argument comes fresh on the heels of a ruling on the case between the SEC and messaging platform Telegram, and the gram tokens it had planned to issue for its Telegram Open Network (TON) blockchain.
In late February, a New York court ruled in favor of the SEC, agreeing that the sale of the future tokens to accredited investors by Telegram and the inevitable re-sale of those tokens to the broad public were two parts of the same distribution scheme and was therefore a securities transaction.
However, the judge did not say that gram tokens were themselves securities (a footnote clarifies the judge did not make a ruling one way or another on that front).
“The wealthy purchasers who obtained large quantities of Kin at a significant discount were but a first step to a broader distribution to the public – in which purchasers planned to and did participate”, the SEC said when it filed motion for summary judgement on March 20.
The Blockchain Association believes the regulator got it wrong for the second time: “The Court should not adopt the novel theory advanced in the recent Telegram decision: that complying with existing securities exemptions by contracting with sophisticated accredited investors amounts to a ‘scheme’ to distribute unregistered securities to the public at some point in the future.”
However, Smith believes that whatever the court decides about Kik, this won’t necessarily affect the entire token industry in the end: “As with the Telegram lawsuit, even if the court finds in favor of the SEC in this case, that does not necessarily have implications for the SAFT model in general.”
The Blockchain Association has already filed two amicus briefs in support of Telegram, arguing that the SEC should not threaten the innovation punishing the company for trying to comply with the regulation, i.e., selling tokens to accredited investors only and filing for an exemption.
The SEC’s case against Kik began last June. In the following months, Kik shut down its messaging app, in which the kin token had been planned to be integrated, and sold it to a company called MediaLab. With the court ruling still pending, both the SEC and Kik filed motions for summary judgement at the end of March, asking for a ruling without full trial.