Highcastle: Talking about Equity Crowdfunding and Security Tokens

by William |October 22, 2018 |0 Comments | Blogs

Interview with Ulyana Shtybel – VP of HighCastle

1. Which problem is HighCastle trying to solve?

The rise of the Initial Coin Offerings (ICOs) has shown that the traditional exchanges and crowdfunding are unable to cover the demand from SMEs amongst new early-stage issuers and global investors. In fact, the crowdfunding market is undeveloped – less than 5% percent of alternative finance in the world belongs to equity-based crowdfunding with 95% of activity taking place at p2p lending platforms an annual turnover of $ 145 bn . The reason for such a uneven split is due to the absence of a secondary market for crowdfunded equity.Both p2p lending and the ICO market do have a secondary market with a moderate level of liquidity.

Aiming to address the liquidity problem for private equity, HighCastle has created a platform where innovative companies and traditional businesses can undertake the offering of tokenized securities – STO (Security Token Offering), and investors can tokenize existing private securities and alternative investments to re-sell and trade them on the secondary market.

Tokenization is the process whereby an asset is transformed into a digital token, representing its accounting, settlement, and management and held securely on the distributed ledger register.

With blockchain technology, companies’ securities are tokenized to facilitate their smooth cross-trading against fiat/cryptocurrencies with a much deeper pool of liquidity.

2. What is Equity Crowdfunding?

Equity Crowdfunding for the last decade has been used by startups to raise funds in exchange for their equity via a sale of shares or convertible notes to a crowd of investment professionals, sophisticated investors, and high-net-worth individuals. Contrary to private equity and fixed income investing, such startup investing is rare about potential dividends, but trying to achieve a subsequent sale of shares for 5-10x the original investment. But why would you invest in startup equity with no opportunity to exit your investment? For this reason, equity crowdfunding is $3 bn and is dwarfed by comparison with $142 bn p2p lending and $10 trillion in alternative assets invested offline annually.

3. Where do you see the biggest advantages and risks using Security Tokens for Equity Crowdfunding?

Primary and secondary markets of private securities alternative investments traded on a blockchain based platform in the form of Security Tokens will disrupt not only the market itself but the whole way the investment banking industry currently operates. Meaning that access to capital will become much simpler for companies. This, in turn, will create broader opportunities for investors, investment banks and advisors. Already now we can see some of the traditional crowdfunding platforms are considering migration to the blockchain, adapting to a new token ecosystem..

The risks associated with the use of tokenization in equity crowdfunding primarily are coming from the regulatory complexity that presents itself. STO platforms are required to provide non-misleading information about the projects, conduct Know Your Client (KYC) and Anti-Money Laundering (AML) checks, have the custodian bank or permission for holding clients’ money, and most importantly – make sure that the company is eligible to sell securities to different type of investors. Has it issued and registered the prospectus or does it comply with the existing regulatory exemptions, as for example is required in the United Kingdom:

the total amount being raised from investors in EEA states is less than €5,000,000 (calculated over a period of 12 months); the offer is made to or directed at qualified investors only (e.g. venture capitalists and business angels and other persons regulated by the FCA); the offer is made to or directed at fewer than 150 natural or legal persons, other than qualified investors, in each EEA state; or the minimum consideration payable by any person is €100,000.

4. How expensive and time consuming is it to do an Equity Crowdfunding with a Security Token?

The cost associated with the issuance and listing of Security Token on the platform is around $15-20K. Issuance of securities in accordance with the regulatory exemptions wouldn’t involve excessive legal costs, but when a company is raising over $5-10 ml, then the necessary registration of the prospectus will cost around $20-50K in each country where the company wants to attract non-professional investors. The other cost consideration factor is the readiness of the project itself. To offer securities to investors, a company needs to provide a comprehensive pitch deck or so-called information memorandum and calculations of financial projections. In case the company doesn’t have a financial director and qualified team members to do it, they need to hire financial (corporate) advisers to do this work for them. Additional legal costs may apply to register actual shareholder/s and transfer the final investment into the company.

5. For which kind of security/asset class tokenization brings the most benefits, for which the least?

Tokenization will bring the most benefit to the market for private securities and alternative investments, publicly-traded securities would be impacted less.

The current stage of development of the blockchain technology has limitations related to its scalability and speed. Distributed registers with one operator are much faster than public blockchains, like Bitcoin or Ethereum. HighCastle has chosen a Stellar-based distributed ledger for its platform, as it is capable of supporting up to 5000 transactions per second, enabling fast and responsive trading environment for the private securities market.

In the next years we will see how blockchain technology will disrupt the private placement market as it finally makes the creation of a secondary market for private securities possible as liquidity continues to build. In a couple of years, blockchain could also begin to disrupt the existing incumbent stock exchanges. However, this will not happen until at least a ten-fold increase in the speed of blockchain as public securities are highly traded instruments and in many cases comprised of high-frequency trading participants. Even now the leading international stock exchanges like the London Stock Exchange, Toronto Stock Exchange, Australian Stock Exchange existing capacity suits just their alternative SMEs markets.

6. What would you recommend projects considering doing an Equity Crowdfunding with a Security Token?

As for any other type of private placement, traditional or tokenized equity crowdfunding, I’d recommend projects considering Equity Crowdfunding via issuance of Security Tokens to have at least a MVP product, completed team, advisory board, registered legal entity and first customers in place. If you don’t have customers yet, you should have a very strong, unique and innovative (meaning game-changing) technology. A company needs to be attractive and mature from the investment perspective. When you start your fundraising make sure you already maintain good communication with journalists to help raise the profile and awareness of your brand.

Be prepared to invest in the marketing of your company, especially if your company has no unique characteristics which helps to distinguish it from its competitors.

Mature startups and operating companies will benefit from fundraising via an offering of their tokenized securities (shares, bonds, loan certificates), but like in any other form of financing, investors will look to the economics of a deal, the intended use of funds and structure of present and future revenues.

7. What was the biggest learning you made during the last year?

The exchanges or crowdfunding/STO platforms as infrastructure providers can’t take the role of financial, corporate and legal advisers. You don’t want a market of tokenized securities without the necessary regulatory requirements and offering rules, which exist to protect the investors’ rights and protect unprofessional investors from fraud and misleading information. The blockchain is just a good technology, economic equations are still the same.

8. Where do you see the Security Token Ecosystem in 5 years?

We will see a majority of crowdfunding platforms trying to migrate to blockchain technology and create blockchain-based secondary markets. Many crypto exchanges will try but fail to meet regulatory requirements in order to be able to trade security tokens. The Ethereum public blockchain will not be applicable for issuance and trading of Security Tokens, so the permissioned blockchains, like the HighCastle blockchain, will spread amongst regulated exchanges, investment banks, and brokers to record the securities transactions. In five years we will see an evolution in blockchain technology speed, enabling public stock exchanges to start to migrate to distributed ledgers and trading platforms will be able to execute high-frequency trading transactions, or at least at human trading speed.

9. Who is your favorite super or real-life hero?

Real-time hero-entrepreneur, smart man and innovator Peter Thiel, author of “Zero to One”, co-founder of PayPal.

How to win in token madness

by William |August 29, 2018 |0 Comments | Blogs | , , , , ,
A brief intro to tokenisation of alternative investments

While financial services have largely been trapped in the Jurassic period, technology brings the future onto the horizon driven by thousands of futurists and tech evangelists. They already live in a free, decentralised individual-based cyber world and each day open small doors to bring us in. In the next few years, financial services will rapidly transform as tech rewrite the rules. What should we look for in the next period? Better terms? Improved customer experience? I think what we really need to keep our eye on is the digitalised securities arena. It becomes an available investable asset class for the very first time and brings with it the promise of enormous potential. Let’s have a look at the trends!

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Please share your feedback with us

by William |August 18, 2018 |2 Comments | Blogs

Dear Customer,
this post is creataed to hear your feedback about our company and our services. Please, share your opinion with us.

Marketplace

New ICO Voting Feature Now Available at HighCastle Marketplace

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |July 10, 2018 |3 Comments | Blogs | , , ,

HighCastle provides to issuers and investors a unique Marketplace where private securities and alternative investments are aggregated and structured to facilitate their selection from the numerous choices obtainable through our search engine.

HighCastle`s API sources investment opportunities from crowdfunding platforms, investment firms and trusted channels, providing investors with cross-platform portfolio management.

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AIMS

How AIMS Token Empowers The HighCastle Ecosystem?

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |June 1, 2018 |0 Comments | Blogs | , ,

If you happen to own a bunch of AIMS tokens, luck is surely on your side now. An AIMS Token is a voucher, which HighCastle accepts at its market value, and those AIMS users who earlier got their tokens at a discount will enjoy an even better gain overall whilst using the HighCastle platform.

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HighCastle listed at XSTAR

AIMS Token Listed at XSTAR Exchange

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |May 25, 2018 |1 Comments | Blogs | , , , , , ,

HighCastle’s AIMS Token is listed on XSTAR Exchange. XSTAR provides institutions and individuals options to trade a variety of digital currencies like Bitcoin, Ethereum, and more. XSTAR is legally compliant with laws and regulations in all countries in which it operates. Details with listing announcement on XSTAR is available here.

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HighCastle Weekly Market Insights

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |May 25, 2018 |0 Comments | Blogs | , , ,

HighCastle Investment Marketplace Data now available via API and CSV file upon subscription. Fill in Data Request form.

Latest Market Review by HighCastle:

A new shift at blockchain arena. HSBC Holdings Plc completed a transaction using blockchain which it said shows the technology is commercially viable for trade finance. Read the full article here.

JP Morgan Tests Blockchain’s Capital Markets Potential. Read the full article here.

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NextBlock HighCastle

Next Block Conference Highlights

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |May 21, 2018 |0 Comments | Blogs, Blogs special | , , , ,

Probably one of the best blockchain events was held in Kyiv last Friday. The Next Block Conference has brought together bitcoin enthusiasts and blockchain experts from the capital market and finance.

The whole day of wonderful impressions with top world crypto influencers Bobby Lee, BTCC Co-founder, Bitcoin Foundation Board Member; Simon Cocking, Editor in Chief at CryptoCoinNews, Senior Editor at Irish Tech News; Steward Rogers, Analyst-at-large, VentureBeat.

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STO

HighCastle Weekly Market Insights

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |May 15, 2018 |0 Comments | Blogs | , ,

Powered by Big Data and Distributed Ledger Technology, HighCastle already provides access to over 10 000 projects with a combined value in excess of £4 bn.  Investors can use HighCastle for a search of global investment opportunities.

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AIMS Token

DDEX Exchange Listing Announcement

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |April 23, 2018 |1 Comments | Blogs | , , , , , , , , ,

HighCastle is proud to announce its AIMS Token first official listing on DDEX. DDEX is a digital asset exchange serving global traders. Building on top of Ethereum smart contracts and the 0x protocol, DDEX allows users to trade ERC-20 tokens from wallet to wallet. No possibility of theft. No uncertainty of deposit/withdrawal lockup periods. We are confident they are the right partner to launch our tokens in the global market.

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Why Tokenized Securities Could Be The Next Blockchain Trend To Change The Capital Market?

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |April 12, 2018 |0 Comments | Blogs | , , , , , , ,

There are about 2000 new ICOs launched each month. Approximately only 3% of these will get financed. Many crypto contributors are beginning to consider alternatives to coins as the liquidity of those is decreasing as the number of ICOs are increasing.
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crypto

The Ontario Securities Commission is focusing on investor protection issues arising from cryptocurrency and blockchain-related developments.

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |April 2, 2018 |4 Comments | Blogs, Blogs special | , , , ,

A potentially first crypto investors protection legislation and standards initiated by Ontario Securities Commission (OSC) in Canada,  could be a solid guidance for foreign financial regulators, crypto exchanges and blockchain-based financial platforms to reach the better protection of investors from scam securities and coins.

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8 Reasons Why HighCastle is a Game Changing Investment Platform

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |March 30, 2018 |0 Comments | Blogs | , , , , , , , ,

HighCastle is a British blockchain-based investment marketplace for private securities and other alternative investments, where investors can discover and build a portfolio of the best property loans and bonds, startup equity and tokens, government bonds and other alternative investments worldwide.

HighCastle is an investment marketplace, designed to tokenize worldwide private securities and alternative investments with the use of HighCastle’s SmartNotes to be regulated under the FCA legal framework.
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HighCastle is initiating FCA authorisation process

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |March 28, 2018 |0 Comments | Blogs | , ,

A deep, comprehensive and intensive process of research and development during the last two years has lead us from the idea of securities tokenization in 2016 to the HighCastle platform in place with the primary investment market and our proprietary API to ensure open-architecture of our business model.
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Ugo Bechis, Adviser at HighCastle and a Co-Chair at Lafferty Brexit Council:

“The HighCastle DLT Infrastructure already designed to be in line with the U.S. Department of Commerce NISTIR “Blockchain Technology” document published on 24 January; the alignment with the U.S. technical and security guidelines ensures the HighCastle platform soundness and scalability”

(more…)

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |March 26, 2018 | Blogs, Blogs special | , ,

Philip Walsh, a senior compliance professional with 15 years experience in FCA Compliance, has joined HighCastle as Regulatory Compliance Director

by Ulyana Shtybel, Co-founder and Vice President at HighCastle |March 26, 2018 |0 Comments | Blogs | , , , , , , ,

Mr. Philip Walsh, an experienced compliance professional offering clients regulatory advice with a particular focus on start-ups operating within the investment business sector and, in particular, stockbroking, asset management (including AIFMs and CPMIs) and investment banking firms, has joined HighCastle, the world’s biggest investment marketplace based in the UK as its Regulatory Compliance Director.

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ICO

HighCastle Private Token Sale has concluded!

by Konstantin |February 27, 2018 |2 Comments | Blogs | , , ,

We are extremely humbled by your support and we would like to extend our gratitude to each of you for your trust in building the HighCastle investment marketplace, which is designed to tokenize private securities and alternative investments with the use of HighCastle’s SmartNotes under the legal framework of the U.K. Financial conduct authority.
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Philip Millar appointed Executive Director at HighCastle

by Konstantin |February 20, 2018 |0 Comments | Blogs | , , ,

Mr. Philip Millar, former Executive Director, CME Asia and Head of Global Clearing Services of HSBC Singapore and Hong Kong has joined HighCastle, the world’s biggest investment marketplace based in the UK as its Executive Director.

Why choose HighCastle Marketplace?

by HighCastle |February 19, 2018 |0 Comments | Blogs | ,

HighCastle is the world’s biggest investment marketplace that provides access to 6242 projects with combined 3.3 billion in value and its growing every day.

With HighCastle as your partner, you profit from a broad range of high-quality capabilities – encompassing access to global markets, state-of-the-art technology, and open product architecture.

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UK Fintech

Keeping the UK at the forefront of Fintech

by Konstantin |February 15, 2018 |0 Comments | Blogs | , , , ,

by Ulyana Shtybel, Co-founder and Vice President at HighCastle

Regulatory framework

The growing number of ICOs, in excess of 2000 per month, highlights the unsatiated demand for financial technology innovations and projects that offer new solutions for existing problems. This keen interest in the ICO model also demonstrates that project founders and investors are looking for simple, fast solutions that will allow them to increase their efficiency and profitability. The current Capital Markets structure does not provide a solution that would offer easily accessible liquidity to private companies.

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RMRF cybersecurity

Ukrainian cybersecurity company RMRF Technology became a security advisor of HighCastle

by HighCastle |February 15, 2018 |0 Comments | Blogs | , , ,

Ukrainian cybersecurity company RMRF Technology became a security advisor of international alternative investment marketplace HighCastle.

Ukrainian company RMRF Technology, which specializes on providing cybersecurity services and development of deception-based solutions signed an agreement with UK-based HighCastle, the world’s biggest blockchain-based investment marketplace, which already provides access to 6 242 projects with combined 3.3 billion in value.

According to the agreement, RMRF Technology will provide the initial security analysis of the platform, developing recommendations for the platform security improvement and assistance in the implementation of these recommendations.

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More “air” is needed for the financial system…

by HighCastle |February 14, 2018 |0 Comments | Blogs, Blogs special | ,

Exclusive interview of LUDWIK SOBOLEWSKI, Board Member at #HighCastle Group, ExCEO at Warsaw Stock Exchange and Bucharest Stock Exchange explains the future of financial markets – for The FinTech Times by Kate Shcheglova

“I tend to see the future of tokenization of assets as a concept to build up “tiers” of financial instruments. There are clear differences between a representation of assets by means of tokens and classical derivative financial instruments, but in essence, these two constructs resemble one another. Having said that, there is a viable perspective for the new concept and its implementations by different companies, like #HighCastle, which combine DLT with securities-backed notes in one #HighCastle’s SmartNote solution. It is also a signal for the regulators, that more “air” is needed for the system. Capital markets, as we know them today, are definitely over-regulated”. – said LUDWIK SOBOLEWSKI

HighCastle, a British Blockchain-Based Investments Marketplace, Has Started Token Sale on Christmas

by Konstantin |February 14, 2018 |1 Comments | Blogs | , , ,

 

I am glad to announce that HighCastle, the world’s first open-architecture investment platform for private securities and alternative investments, that is managed and operated by the UK-registered HighCastle Group Ltd (company number 10619102), has started the presale of its voucher token.

As the biggest digitalised investment marketplace in the world, and due to its revolutionary idea, HighCastle is now is now recognized by respected investment banking and law professionals as one of the Most Influential FinTech Companies. HighCastle is using an open-architecture technology and enables digitalization and online access to $1.7 trillion market of private securities worldwide.

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Begin your week right!

by Mariia Maksymtsiv |March 27, 2017 |1 Comments | Blogs | ,

Beginning of the week should be exiting and spent in a good company. HighCastle offers it’s company to make your week enjoyable.

Let’s begin!

First of all make sure you’re in a cozy and homly atmosphere to begin our journey.  For today HighCastle prepared three updated core activities called “stand-ups” :

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Investing in Frontier and Emerging markets: Ukraine

by Konstantin |February 13, 2017 |0 Comments | Blogs | , , , ,

Investing in frontier and emerging markets attracts worldwide investors by its higher Return on Investments. HighCastle’s broad knowledge of these dynamic markets and our approach to the risk management when selecting the projects to our Platform in partnership with our Authorized Advisers, helping Investors to choose between qualitative businesses and diversify effectively.

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BUILDING A NEW ERA OF INVESTING

by Mariia Maksymtsiv |January 31, 2017 |0 Comments | Blogs | ,
HighCastle is a global online investment platform that allows individuals and institutions to invest in a range of investment opportunities. For the businesses HighCastle offers a hassle free resource to raise money for their needs. Quickly, Efficiently, Safely.
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Debt-Based Crowdfunding is the Favorite Among Leading Platforms

by Mariia Maksymtsiv |December 27, 2016 |0 Comments | Blogs | , , ,
With traditional methods requiring a lot of paperwork, time, and hassle, new alternative lending opportunities are becoming more and more mainstream as developers continue to realize the many benefits this source of funding provide.

 

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European Investment Bank

by HighCastle |December 26, 2016 |0 Comments | Blogs, Blogs special | , , , ,

What is the EU’s bank?

The  EIB is the European Union’s bank. This  bank is owned by and representing the interests of the European Union Member States. It works closely with other EU institutions to implement EU policy.

A major player

As the largest multilateral borrower and lender by volume, they provide finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% read more

Grants for starting a business

by Mariia Maksymtsiv |December 23, 2016 |1 Comments | Blogs | , , , ,
If you’re a small business owner or thinking of starting a business, finance is probably your biggest concern. You may be wondering if there is any funding available for start-ups.

We’ve prepared a overview some useful grants to apply for.

Accelerating Commercialisation Grants offer ventures up to 50% of expenditure on a project, which is capped at $250,000 for commercialisation offices and eligible partner entities, and $1 million for other applicants. read more

Hunting for AI

by Mariia Maksymtsiv |December 22, 2016 |0 Comments | Blogs

Deloitte Global predicts that by the end-2016 more than 80 of the world’s 100 largest enterprise software companies by revenues will have integrated cognitive technologies into their products

Basing on the Deloitte TMT Predictions it is expected that the cognitive technologies that will be the most important in the enterprise software market will be: machine learning, natural language processing and speech recognize read more

BREAKING DOWN ‘Blockchain’

by Mariia Maksymtsiv |December 13, 2016 |1 Comments | Blogs | , , , , , ,
E very straightforward enterprise would like to be involved in blockchain that is one of the most intriguing technologies currently in the market today.

Introduction to Blockchain. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.

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