Cryptocurrency regulations in the United States – Japan Security Token Business Association  
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Cryptocurrency regulations in the United States


1 Regulations on cryptocurrency in the United States
2 SEC’s stance on cryptocurrency
3 STO platform(tZERO)
4 STO platform(Polymath)
5 Works cited(Reference)


1 Regulations on cryptocurrency in the United States

SEC is deeply involved in cryptocurrency regulation in the United States and the regulation is strict.
ICO is rarely approved, and many states ban citizens from participating in ICO.
SEC is skeptical on new cryptocurrencies.
Regulations vary by states. Therefore, exchanges tend to converge in states with looser regulations.

2 SEC’s stance

SEC thinks there’s a national framework of regulation on cryptocurrency because there isn’t sufficient investor protection against liquidity risk and market manipulation risk.
The commission thinks that technologies like blockchain technology will flourish and CFTC agrees.
Jay Clayton, the chairman of Securities and Exchange Commission thinks that the regulation should be managed by the commission.
SEC has opened Strategic Hub for Innovation and Financial Technology (FinHub) to receive inquiries from blockchain, cryptocurrency and AI companies.
FinHub aims to make it easier for users to talk to commissioners at SEC by simplify access to SEC’s numerous services.

3 STO platform(tZERO)

 Founded in October, 2014. It has made a revenue of 130 million dollars by October, 2018. Investors will not be allowed to move funds for 90 days since receiving TZERO (tZERO’s security token) based on federal securities laws. tZERO is a security token trading platform equipped with risk management software, order management system, and a matching engine and is currently under patent application as a “crypto platform” for trading digital assets.
They claim “the tZERO platform utilizes cryptographically secure distributed ledgers to streamline existing market systems. The integration of blockchain technology creates increased auditability, transparency, and efficiency in traditional market processes. Additionally, blockchain integration reduces costs and transaction times. Once tZERO’s platform is live, businesses can issue security tokens for fundraising purposes through the exchange.”
tZERO token provides 10% of quarterly adjusted total revenue to the token holders.

tZERO’s strengths

①tZERO is registered on SEC, and it is a FINRA member broker dealer.
②tZERO’s Digital Locate Receipt software is designed to provide a transparent and efficient securities lending and borrowing system.
③Through over 125 broker dealers, tZERO provides an original routing technology service. It provides connectivity, market access, the smart order routing and algorithmic trading solution.
④tZERO processes 15 million to 18 million transactions per day and has the capacity to process over 100 millions traditional transactions per day.
⑤The Alternative Trading System(ATS)makes it possible to trade 24 hours, and it provides liquidity even when other securities markets are closed.
⑥tZERO purchased a majority stock of a machine advisory company that can conduct an advanced financial modeling and create an adaptive variable portfolio. This advantage might be available to the token holders in the future.

4 STO platform(Polymath)

・Goals:Establish a platform for tokenization of securities to tokenize securities such as stocks, bonds, and derivatives and make purchases, management and transaction on blockchain.
・Owns a three-layer platform (document , legal, rules)
・Automated dividing system(certain securities holders can receive digitalized dividend)
・ “KYC adaptive” token technology(confirm the source of the fund by examining the client’s information)allows only whitelisted users can trade security tokens on the platform.
・POLY token was listed in January, 2018 at the price of 0.789 USD and soon hit the record price of 1.64 USD.

5 References


Polymouth purchasing and trading secuirities on the blockchain

What Is Polymath (POLY)? | Everything You Should Know

tZero on stargengine

What Is tZERO? (And Why It Could Be a Big Deal)