State Your Business – Local Legislative Support for Crypto

Most of the regulatory heat on crypto has been coming from the federal level. Not only has the market suffered a series of shocks due to statements put out by SEC officials, but the whole approach has been so haphazard that some in the community would rather have the band-aid pulled off quickly, as it were. But focusing on the grubby fingerprints of federal regulators is to miss a much rosier picture at the state level. With a few exceptions, many states have been passing crypto friendly legislation with a variety of interests in mind, and while some in the industry fear this might lead to a contradictory, patchwork system across the US, at least their hearts are in the right place.

Cash on a Wire

Wyoming is leading the way in supporting blockchain and virtual currency through a spate of recent laws, one of which exempts crypto from existing state regulations on wiring money through services like Western Union. This allows cryptocurrency exchanges to operate freely in the state without having to jump through the hoops necessary to get licensed. Also gone are the heavy transaction fees that typically apply, and any worry about adhering to regulation on how and where currency can be sent. Although Wyoming and others have elected to let crypto move freely, other states, like Nebraska and Hawaii, are heading in the opposite direction, requiring more licensing or more scrutiny under anti-money laundering laws.

A More Perfect Bureaucracy

Other states have recognized the potential that blockchain has for record keeping. Colorado, in particular, is looking to embrace the distributed ledger’s ability to securely create, record, and store government records, introducing a bill to explore how the blockchain can be used to store medical records as well as digital transactions carried out between citizens and the government.

West Virginia is showing more legislative moxie, having unveiled a blockchain-based voting system in the first part of 2018. The pilot program allowed military voters stationed overseas and their families to cast votes in the state primary using only their smartphone (Apple or Android) and their valid state ID. We’re still waiting on the post mortem of whether the program was successful or not, but it could portend seismic changes in American politics to come.

Desperately Seeking Investment

Perhaps the most common state-level reaction to blockchain technology and cryptocurrency is laudable, if transparently desperate – legislation as marketing pitch to a growing industry. Wyoming has passed a bill that exempts ‘utility tokens’ from state security laws, as long as the token is fungible for “goods, services, or content.” Ethereum fits the definition, as it can be used with apps on the network, but whether or not this will attract other ICOs to the state is uncertain. Wyoming can also pass all the exemptions it wants, but once the federal government finally weighs in on the matter, all of them will be moot.

Delaware, already a hotbed of Fortune 500 companies, tried to be the fastest to the finish line by unveiling its “Blockchain Initiative” back in 2016, but its ambitions have foundered as local corporate interests have balked at the dangers of fraud, hacks, and the absence of any federal insurance. Adding insult to injury, the director of the program resigned in January, 2018. Vermont has also encountered a bit of slapstick in its attempt to woo blockchain companies with an idea to “attract with tax.” The state government introduced a bill that would levy a $o.o1 tax on every token mined or otherwise created, as well as any transfer or transaction, while waving all other regulation and taxation. Finally, the trophy for attention seeking goes to Tennessee, which passed a bill that did nothing more than affirm that both records on the blockchain and transactions executed via smart contract are valid. As if there was any doubt.

While it’s certainly encouraging that states are passing laws in favor of crypto and blockchain, it’s hard to get too excited when one considers the federal government’s authority to override such legislation with the stroke of a pen. It’s also unclear whether or not a patchwork approach where laws vary dramatically from state to state is the right atmosphere for the new technology to thrive under. And finally, despite our excitement over the industry’s growth, we shouldn’t lose sight of the fact that neither crypto nor blockchain are supposed to need government laws – positive or negative – in order to function.

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Will Minor
Will is a writer-at-large for Block Telegraph. A prolific writer and futurist from New York City, he specializes in all things cutting edge. He holds a Masters in the Arts and has taught extensively abroad.

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Billionaire Teddy Sagi Makes First Investment in Blockchain

Green glass, modern space

New Industries, New Opportunities

Both the fintech and blockchain industries have grown in leaps and bounds over the past two years, with several projects establishing a strong foothold on the world stage. It’s becoming more common to receive news of investment received by such projects. Recently, it was revealed that Teddy Sagi, an Israeli businessman famous for being the owner of London’s Camden Market, has substantially invested in Distributed Lab, a Ukrainian start-up. Sagi joins the list of billionaires keen on cashing in on these rising markets.

Teddy Sagi, currently ranked 6th on Forbes’ richest Israeli people, with an estimated net worth of somewhere around $3.6 Billion, is originally from Tel Aviv. Among other projects, he has invested in real estate, advertising, and payment processor ventures. However, Sagi is most famous for the acquisition of the parent company of London’s iconic Camden Market, a transaction that netted over £400 million in March 2014.

Sagi also purchased Alpha, a British brokerage firm which was later rebranded to “Tradetech Group” in August 2017.  He is the founder of Playtech, a gambling software developer and distributing firm based in the Isle of Mann.  Besides being a major entrepreneur, he is the majority shareholder at payment clearing firm Safecharge.

Camden Market, London
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Camden Market, owned by Teddy Sagi. Image credit: flickr.

More on Distributed Lab

Distributed Lab is a Ukraine based crypto and decentralized technology expertise center, headquartered in Kharkiv, Sums’ka Oblast.  Headed by CEO Vladimir Dubinin, the company uses blockchain technology to improve users’ trade experiences by representing assets as tokens. It offers its services to companies looking to add liquidity to their merchandising. It has developed its own “enterprise tokenization platforms” for four separate sectors: crowdfunding, remittances, investment funds and real estate.  Some of the high profile projects they are working with include a bitcoin wallet, an auction platform, and a gold based cryptocurrency called Bullion (CBX).

Implications of the Investment

Distributed Lab is Sagi’s debut investment into blockchain, and is expected to be a game changer in the start-up sector of this young industry. His entry  adds to the long list of millionaire and billionaire investors turning their attention towards blockchain projects, which in turn should result in an increase in the general awareness and acceptability of the technology.

As more attention falls on blockchain globally, and private investors flock like birds to a feeder, we’ve already seen the formation of several investment funds over the last two years, including Blackrock’s cryptocurrency team and Coinbase’s courting of hedge fund money. Indeed, cryptocurrency market and management services are in great demand, with several Swiss Private Banks starting to offer their services. A June 2018 study found that about 61% of cryptocurrency investment funds were created in 2018 alone, with an additional 140 entities formed in 2017.

Receiving the substantial backing of a reputed and well-known investor like Teddy Sagi is considered to be an important and safe option for blockchain start-ups. It is certainly regarded as more advantageous than crowdfunding, which is regarded as an unstable form of capital collection, especially for blockchain companies where regulation framework remains in flux.

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InstaSupply to Join Sweetbridge Alliance in Finance-Tech Partnership

Sweetbridge Alliance

A Move That Makes Sense

The global system Sweetbridge has announced that it has added InstaSupply to its Sweetbridge Alliance network of financing for supply chains, allowing it to resell Sweetbridge technologies officially.

The alliance will also mean that InstaSupply can provide these services more effectively than trade financing from traditional banking institutions.

“Sweetbridge’s blockchain liquidity protocol enables us to offer the most competitive supply chain finance solution to SME businesses,” said InstaSupply CEO Lee Pruit. “This is a massive differentiator compared to traditional financial institutions and incumbent technologies, and is a game-changer for us and the suppliers we work with.”

Sweetbridge chairman and founder Scott Nelson said that Pruit’s experience in business supply chains, along with InstaSupply’s vast customer network, made a combination with Sweetbridge’s Liquidity Protocol a sensible move. Nelson said the partnership will enable organizations to be paid instantly with improved terms and continue pushing for even better methods as time goes on.

Improving Services in Tandem

Sweetbridge is an international network of blockchain, finance, and software experts. The company describes itself as a platform dedicated to combining modern blockchain principles to the concrete factors of these industries. Its goal is to tackle the issues that make finance less efficient, such as legal technicalities and other problems.

InstaSupply Sweetbridge Alliance
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Image Credit: InstaSupply/Twitter

Sweetbridge is known for improving transparency in worldwide supply chains. Now, it can take advantage of InstaSupply’s contributions to financing and digitizing the supply chains of midsize businesses using blockchain tech.

The two organizations are already known for their long-term efforts to lower the costs of capital and speed up suppliers’ payments cycles, as well as for their blockchain technologies. Both companies say that this is a sensible move toward furthering those goals.

InstaSupply is a software company whose purpose is to modernize business functions in a streamlined online platform. The company’s business-to-business customer network consists of companies ranging from $30 million to $2 billion in annual revenue. The company possesses a growing customer base and serves an international clientele of more than 2,300 businesses.

In addition to its resources, InstaSupply will now be an official reseller of Sweetbridge’s Liquidity Protocol. This will give InstaSupply the opportunity to settle supplier invoices instantly and authenticate them in real-time. Currently, the cloud-based company settles tens of millions of supplier transactions every year for its customers. This new partnership will allow InstaSupply to take advantage of Sweetbridge’s protocol technologies. This will provide companies and suppliers with access to capital at lower costs. They also can take advantage of improved terms, quicker response times, and better overall capability.

The companies in tandem will take on the Sweetbridge Alliance Network, as well as the Accord Project and Mattereum, network platforms managing the legalities of blockchain contracts. Nelson says they aim to continue to improve their combined services on these platforms to more effectively bring blockchain into the broader world of business.

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