Posted on December 4, 2018

GSX Group, tZERO, SharesPost, and Techemy among founding members of the Verified Token Framework to provide interoperable security token guidelines

A consortium of some of the most influential blockchain industry leaders have announced the launch of a common framework to facilitate market interoperability of security tokens. The Millbrook Accord, formed at the Blockchain South 2018 Leadership Summit at the Millbrook Resort in Queenstown, New Zealand, includes SharesPost, Techemy, tZERO, Gibraltar Stock Exchange (GSX) Group, Global Advisors, ERCDEX, NEM, HyperLink Capital, Alchemist Ventures, Bankorus, Blockchain Labs, and AnyPay.

Governed by the Blockchain Token Association (BTA), the Millbrook Accord is a working group focused on the promotion and representation of Security Token initiatives, and the maturation of new digital asset classes. The accord’s new Verified Token Framework (VTF) will provide leading industry guidelines on security token interoperability, and aims to become the foremost reference document, codebase, and community for the security token ecosystem. The core VTF codebase itself is open-source.

Security tokens are digital assets representing traditional securities, including physical assets and equities, and are expected to serve as a fundamental pillar of the future of financial products. The addressable market for security tokens is estimated to be around $500 trillion USD, with investments in the new asset class having already exceeded $500 million USD in 2018 alone.

The primary purpose of the Millbrook Accord is to put forward practical solutions in order to facilitate a more seamless process for verifying identities, navigating jurisdictions, and ensuring compliance among token holders, exchanges, and platforms.

Saum Noursalehi, CEO of tZERO, said: “In order for the security token movement to grow, companies need to agree on an unbiased standard. The Verified Token Framework is a step toward ensuring that digital assets are interoperable and that the unique challenges presented by security tokens are addressed.”

In order to support continued collaboration and consensus-building in addressing some of the biggest obstacles to the continued expansion of the blockchain industry, the Millbrook Accord will hold quarterly bake-offs in locations all over the world, with the first being held in New York City. As part of these meetings, members will be encouraged to review and contribute to a new GitHub repository, which has been set up to help advance the accord’s software goals.

Jeff Pulver, Chairman of the Blockchain Token Association, said: “In the Voice over Internet Protocol era, we invited industry leaders to bring their production-ready code to quarterly bake-offs, where developers sought to make their code interoperable. The result was a free and open source set of standards, which ultimately led to interoperability of services. We believe a similar collaborative approach to technological advancement will assist in the acceleration of blockchain adoption and the maturation of the global security tokens ecosystem.”

Addressing the currently fragmented industry standards which result from differing regulatory requirements in global jurisdictions, the Millbrook Accord VTF aims to accelerate adoption and growth of tokenized securities by supporting industry alignment and collective focus to overcome a common challenge.

In addition, the VTF codebase will include various regional compliance and feature requirements for security tokens. NEM, a founding member of the Millbrook Accord, will serve as the first non-Ethereum based blockchain implementation of the VTF through its protocol features, making the VTF the first formalized multi-chain effort for security tokens to date.

Fran Strajnar, CEO and Founder of Techemy, said “The members of the Millbrook Accord and the BTA have come together due to our shared belief that the security token industry is set to experience an interoperability crisis. Tokens issued by various groups will be incompatible between blockchains, within market participants, including the exchanges that will list them, as well as the custodians and broker dealers who will handle them. The Millbrook Accord is an effort to create an interoperable framework for security tokens, which can be adopted on any smart-contract enabled blockchain and in any country.”

About the Millbrook Accord:
The Millbrook Accord is a working group formed by key drivers of the security token movement. Formed at the Blockchain South 2018 Leadership Summit at the Millbrook Resort, Queenstown, New Zealand, the Millbrook Accord sets out to provide solutions and industry guidelines surrounding the current complexities around security token interactions. Focusing on the development of interoperability solutions for the securities token market, the working group aims to provide practical solutions when it comes to navigating jurisdictions and ensuring compliance among token holders, exchanges, and platforms. Spearheaded by Techemy Ltd, the group’s founding members include SharesPost, tZERO, GSX Group, Global Advisors, ERCDEX, NEM, HyperLink Capital, Alchemist Ventures, Bankorus, Blockchain Labs, AnyPay, and Wachsman.

Supplementary and Contact info:



Posted on August 20, 2018

Here at the Blockchain Token Association, we are looking forward to participating in key stakeholder meetings in Congress next week on the future of cryptocurrency legislation. Stay tuned to BTA for a readout in the meeting. BTA continues to press Congress to insert itself in the discussion so as to end the current environment of regulation/lawmaking by enforcement.

Rep. Davidson to Host Industry Leaders for ICO Regulation Forum

Rep. Davidson (R-OH) invited several Members of Congress, industry leaders, nonprofits, and lobbyists, including the Blockchain Token Association to a September 25 forum where they’ll discuss legislative efforts to improve the business environment for cryptocurrencies.  SEC Chairman Jay Clayton has said that ICOs qualify as securities offerings.  In contrast, SEC Commissioner Hester Peirce indicated that she doesn’t believe all tokens are securities, and SEC Director of the Division of Corporation Finance William Hinman declared that Ether is not a security.  Rep. Davidson is expected to introduce an ICO bill this fall, and has been in contact with the BTA and the SEC about his work on the topic.

Senate Confirms Pro-Crypto Elad Roisman to be Republican Member of SEC 

The Senate voted 85-14 to confirm Elad Roisman to be a Republican member of the SEC.  Mr. Roisman most recently served as the chief counsel for Republicans on the Senate Banking Committee.  Speaking on blockchain technologies and ICOs at his July confirmation hearing, Mr. Roisman said the SEC should “approach these new challenges in a fair and transparent manner,” and must “examine and re-examine its rules, regulations, and guidelines” to adapt to the standards of a market that has “evolved.”  With this confirmation, the SEC has a full, five member commission.

House Financial Services Committee Examines Future of Coins and Banknotes

The House Financial Services Subcommittee on Monetary Policy and Trade held a hearing on the future of coins and banknotes.  Bureau of Engraving and Printing Director Leonard R. Olijar and United States Mint Director David J. Ryder testified.  The hearing included the assertion that while coins and banknotes are essential to the economy, it is essential to be able to forecast future demand so the Federal Reserve is not caught off-guard by dramatic increases or decreases in demand.  “With new and disruptive products entering the market, demand for coins and paper money may grow at a slower pace and possibly even decrease one day,” said Subcommittee Chairman Barr (R-KY).  Mr. Ryder said he believes that “for the foreseeable future, coins will remain important instruments for settling financial transactions. However, with expanded cryptocurrency options on the horizon, the importance of their serious study cannot be underestimated.”

Federal Judge Rules ICO Frauds Fall Under Securities Law

A U.S. federal judge ruled that a pair of reportedly fraudulent ICOs fall under securities laws, denying the defendant’s motion to dismiss the case.  Maksim Zaslavskiy has been accused of committing securities fraud for token sales representing shares in separate diamond and real estate businesses.  Mr. Zaslavisky’s lawyers argued that “securities laws are unconstitutionally vague as applied” to the indictment, but Judge Raymond Dearie wrote that “Congress’ purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called,” and thus the securities laws are not too vague for a reasonable jury to apply the Howey Test.

Lawmakers Call on SEC to Increase Investor Protections

House Financial Services Committee Ranking Member Waters (D-CA), House Committee on Education and the Workforce Ranking Member Scott (D-VA), Senate Banking Committee Ranking Member Brown (D-OH), Senate Health, Education, Labor and Pensions Committee Ranking Member Murray (D-WA), and other lawmakers penned a letter to SEC Chairman Jay Clayton urging the SEC to revise the proposed Regulation BI governing the standards of care owed by broker-dealers when providing retail investors with personalized investment recommendations.  “Regulation BI falls woefully short,” the letter reads, and is “a less protective proposal for investors that applies two distinct standards: a ‘best interest’ standard for brokers and a ‘fiduciary”’ standard for investment advisers, neither of which, as described by the Commission, matches the strong, enforceable standard set by Congress.”  The lawmakers urge the SEC to “require brokers to abide by the same high standard that currently applies to investment advisers so that their advice to retail investors is provided without regard to their financial or other interests.”

SEC Suspends Cryptocurrency Investment Vehicles

The SEC suspended trading of Bitcoin Tracker One and Ether Tracker One exchange-traded notes until 11:59 PM on September 20, citing “a confusion amongst market participants” about the nature of the financial instruments.  The release said “The broker-dealer application materials submitted to enable the offer and sale of these financial products in the U.S., as well as certain trading websites, characterize them as ‘Exchange Traded Funds.’ Other public sources characterize the instruments as ‘Exchange Traded Notes.’ By contrast, the issuer characterizes them in its offering materials as ‘non-equity linked certificates.’”

Lawmakers Conclude that Terrorists Prefer Fiat Currency over Cryptocurrency

The House Financial Services Subcommittee on Terrorism and Illicit Finance held a hearing to examine the financing of terrorists groups, and initially expressed concern that cryptocurrencies might play a role in illicit activity.  However, Yaya Fanusie, Director of Analysis for the Foundation for Defense of Democracies Center on Sanctions and Illicit Finance, reminded members that most terrorists currently live in environments where cryptocurrencies are not operable.  Fiat currency is preferred because of its anonymity and feasibility as a means of payment.  Members concluded that al-Qaeda, ISIS, and other terrorist groups have attempted to raise money through cryptocurrencies, but not had success.  Mr. Fanusie did suggest that it would be prudent to create measures to effectively track cryptocurrency activity, to “limit the ability to turn digital currency markets into a sanctuary for illicit finance.”  Further, Oren Segal, Director of the Anti-Defamation League’s Center on Extremism, said “Certain funding modalities like Bitcoin and other cryptocurrencies are ripe for exploitation as extremists get more tech savvy. But as mainstream funding platforms become aware of the exploitation of their services, they have increasingly moved to shove these extremists out and we welcome these efforts.”

Coincenter Updates Securities Framework

Coincenter released their updated version of their Framework for Securities Regulation of Cryptocurrencies, which maintained much of the old framework but made a few notable changes.  The framework now uses the term “token,” rather than “alt-coin,” which Coincenter says has “fallen out of usage and also seems to be a bit pejorative.”  The rubric is simplified from four software variables (scarcity, consensus, distribution, and permissions) and three community variables (transparency, decentralization, and profit-development linkage), to three variables: decentralization (which includes consensus, scarcity, transparency, and profit-development linkage), functionality, and distribution.  They think the simpler terms maintain the heart of the original analysis, but reflect SEC Director of the Division of Corporation Finance William Hinman’s inquiry: “putting aside fundraising activities (distribution) is the token functional and decentralized?”  The new report expands on token functionality and distribution, as the original report predated the ICO boom.  They expect to continue updating this section as token sales continue to evolve.

SEC Penalizes Crypto Hedge Fund and “ICO Superstore”

The SEC issued a cease and desist order and a $200,000 fine to Crypto Asset Management (CAM) and its founder Timothy Enneking, saying that the hedge fund “misrepresented” itself as the “first regulated crypto asset fund in the United States.”  CAM raised $3.6 million from 44 investors in late 2017, bringing its NAV to $37 million.  However, according to the filing, the fund has “never been registered with the [SEC] in any capacity.”  CAM has not admitted guilt to the allegations, but agreed to stop its public offering and offered a buyback to investors.  The SEC also issued an order against “ICO superstore” TokenLot.  The SEC alleges that TokenLot breached the law by failing to register with the SEC.  Like CAM, TokenLot has not admitted to violating the law but agreed to pay a $471,000 fine.

New York State Department of Financial Services Approves “Stablecoins”

The New York Department of Financial Services (NYDFS) authorized the Winklevoss brothers’ Gemini Trust Company and Paxos Trust Company (formerly itBit) to offer a price-stable digital currency pegged to the dollar.  Stablecoins aim to offer a liquid, fully redeemable, digital alternative to cash that’s available for instantaneous transactions.  The Gemini and Paxos tokens are both transferrable on the Ethereum network because they’re each collateralized 1:1 by the U.S. dollar and ERC20 tokens. The tokens are created at the time of withdrawal from the platforms and redeemed (destroyed) at the time of deposit.  Tyler Winklevoss said “To date, there has been no trusted and regulated digital representation of the U.S. dollar on the blockchain… We are excited to bring the Gemini dollar to market, a stablecoin that combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of the NYDFS.”

SEC Examining Brokerage Firms’ Crypto Practices

Recent reports indicate that the SEC has been questioning brokerage firms about business practices and client relations when dealing with cryptocurrencies.  The SEC appears to be gathering data on investment advisers’ involvement in trading and financing ICOs, and fees associated with this work.  Earlier this year, SEC and CFTC chairmen released a joint statement signaling their intent to increase transparency in the market and deter fraudulent and abusive practices.



Posted on August 8, 2018

In recent weeks, we have been watching the narrative unfold in D.C. as distinctly hostile to blockchain tokens. Threat warning orange. D.C. continues to have a negative view of Blockchain tokens mainly because as an agent of change, the tokens threaten nearly every conceivable D.C. institution that involves wealth accumulation: banking, capital markets and consumer protection. This is playing out as regulators disclaim responsibility for providing regulatory clarity (see “CFTC Doesn’t Want Authority to Regulate Cryptocurrency Cash Markets”) and cryptocurrency getting the national security threat label (See “Fed Chairman, Lawmakers, DOJ Express Concern about Cryptocurrencies’ Potential National Security Threat”). Against that backdrop, the ETP was rejected, setting the narrative theme for future Blockchain policy discussions to focus on the inability of the industry to, “prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.” What does all this add up to: the industry needs to improve its ground game. Get more serious about regulations and crack down on known fraudsters and bad acts.



Posted on July 3, 2018

These past few weeks in the cryptocurrency policy world have been interesting. Collected here are some of the most interesting and consequential headlines of the past month. What is the top line takeaway? The U.S. government’s clear ambivalence to the developing security token industry is on display. There is a screaming need for multi-disciplinary thought leadership that finds novel ways to apply today’s rules for tomorrow’s technology. Malta has taken the lead in innovative legislative solutions and we are well served to pay attention to their centralized licensure model and oversight arrangements. There is existential threat in the U.S.; however, as the GAO is now directed to investigate the uses of crypto for illicit finance. the publication of this final report could poison goodwill and set the tone for future discussions- association with illicit finance as opposed to a means of capital formation to develop cutting edge technological solutions.


Posted on June 27, 2018

In late July, BTA will be attending a meeting with the Governor of Rhode Island and her economic development team to explore economic incentives to help bring blockchain companies and jobs to the state of Rhode Island. If you are in a position to commit to bringing jobs to Rhode Island and can be available to join the meeting, please contact us.


Posted on June 27, 2018

BTA is assembling its internal working groups. If you are interested in joining a working group, please contact us for additional information. Our initial groups include:

  • Regulatory Policy and Security Tokens
  • Regulatory Policy and Utility Tokens
  • Marketing and Public Relations
  • ECPMembership, Global Meetups, and Self-regulating Standards


Posted on May 18, 2018

Blockchain technology is over-hyped. And, it’s a $4 quadrillion opportunity.  Jeff Pulver said both those things today on-stage at Destination Visionaries Summit Kingston, Jamaica. One of the creators of our voice-over-IP protocols, Pulver is not insane, and not unaware of the tension between those statements.


Posted on May 16, 2018

During the NYC event during Crypto Week in NYC, BTA CEO/Founder, Jeff Pulver articulated the core, unifying principles of the BTA. They are as follows.

BTA members agree, by virtue of the membership in the organization to adhere to these core principles in the conduct of their business.

  1. All members of the Blockchain Token Association agree not to participate in any legally or unethical “front running” activity.
  2. All members of the Blockchain Token Association agree to follow anti-money laundering laws.
  3. All members of the Blockchain Token Association agree to be rigorously transparent in all financial dealings and to make detailed financial reports available to consumers.

BTA will self-police adherence to these core principles.