Stellar Lumens (XLM) Forum with for newcomers and contributor's rewarded Check here

Mining or trading, which is better? I am new to cryptocurrency and i see Stellar Lumens is good, but i want to ask you guys which is better between that two

Read More Read More, Posted by: wahyulxy
Are you wondering why people love Zennies coin? Well, Zennies coin is a decentralized, safe and private means of sending and receiving digital payment anywhere in the world. With Zeni, you can play games on the Zennies game arcade and even create your own game.

Zennies also helps developers to build applications using their Zincubator program. Above all, you can earn money in their referral program by inviting your friends to join the Zennies community. Join here now for free.

Read More Read More, Posted by: Milner
Please share what you think about stellar
will the price flying high ???
Confused Confused Confused Confused Confused Confused Confused Confused Confused

Read More Read More, Posted by: lim bosum
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Yesterday, amid a rally that pushed Bitcoin to all-time highs globally, the price of a single Bitcoin broke 1,000,000 yen. While Westerners eye the sensational $10,000 level, Japan has seen their biggest psychological price barrier shattered. This is fitting, since there’s reason to believe that Japan started the massive Bitcoin rally to begin with.

Granted, Bitcoin’s price has been steadily rising since the fall of 2016, but April’s news that Japan had formally recognized Bitcoin as a legal currency certainly helped propel the currency to new heights. By exempting the currency from an 8% consumption tax, Japan further increased citizens’ desire to own Bitcoin.

Increasing adoption, growing volumes
Bitcoin’s rising price has been attributed to increasing adoption and continuing integration into mainstream financial markets. In Japan, good news continues to come to the fore, with major conglomerates becoming involved with Bitcoin, and trading volume from shuttered Chinese exchanges coming to Japan’s markets due to favorable regulations.

In fact, China’s ban on Bitcoin exchanges pushed Japan to the forefront of the world’s Bitcoin markets. Beginning in September, and continuing to the present time, the majority of Bitcoin trading has been denominated in Japanese yen. At press time, the yen is responsible for an impressive 59.6% of all Bitcoin trades worldwide.

While China dominated the Bitcoin trade for years, it’s clear that the crown has passed to the island nation of Japan. What happens on Japanese markets has powerful ripple effects throughout the global Bitcoin economy. Japan’s continued bullishness, indicated by Bitcoin’s current price of 1,084,000 yen, makes an assault on the West’s $10,000 level nearly inevitable.


Read More Read More, Posted by: stefanuspn
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The total cryptocurrency market cap has achieved another historic milestone. Buttressed by a record-setting bitcoin price rally, the total crypto market cap has crossed the $300 billion threshold for the first time — making the combined capitalization of all cryptocurrencies more valuable than Bank of America.
Source: CoinMarketCap

In the past week alone, the total cryptocurrency market cap has grown by more than $60 billion — a number the crypto market cap reached for the first time on May 17. It has only been six months since that achievement, but the crypto market cap has already increased fivefold, bringing it to a new all-time high of $305.1 billion on Monday morning.
Source: CoinMarketCap

The crypto market cap surpassed Visa’s total valuation on Friday, and on Sunday morning it raced past both Wells Fargo and Bank of America — two banks that received government bailouts during that same financial crisis referenced by Satoshi in the Bitcoin genesis block.
Source: Google Finance

Bitcoin Price Eyes $10,000
The crypto market cap surge came on the heels of an unprecedented bitcoin price rally that saw the value of the flagship cryptocurrency increase by $1,000 in less than two days. In the past week, the bitcoin price has risen by 20 percent, and — despite a $500 dip this morning — continues to challenge the $10,000 mark. At present, the bitcoin price is trading at a global average of $9,628, which translates into a $160.8 billion market cap.
Bitcoin Price Chart | Source: CoinMarketCap

The bitcoin price has been in an uptrend for the vast majority of the year, but it is likely that the pace has quickened due to the impending launch of bitcoin futures contracts on U.S. derivatives exchange CME. The exchange operator has previewed that this product will be available in early December, and traders appear to be pricing in the event before it arrives. It remains to be seen what effect the official listing of futures contracts will have on the bitcoin markets.

Ethereum Price Tests $500

Though the bitcoin price is consuming most of the headlines, the ethereum price has been setting records of its own. This morning, the ethereum price rose to a new all-time high of $493, although it has not yet been able to crack the $500 barrier. At present, ethereum is trading at $476, which represents a 24-hour increase of three percent and translates into a $45.7 billion market cap.

Ethereum Price Chart | Source: CoinMarketCap

Bitcoin Gold Debuts in Fifth

The altcoin markets have more or less caught bitcoin’s tailwind, enabling many other cryptocurrencies to reach historic milestones of their own.

Source: CoinMarketCap

The bitcoin cash price rose three percent to $1,639, increasing its market cap to $27.6 billion. The ripple price, however, traded sideways, preventing its valuation from breaking through $10 billion. CoinMarketCap has added bitcoin gold to its index, and the coin debuted in the fifth position with a total capitalization of $6.1 billion.

Bitcoin Gold Price Chart | Source: CoinMarketCap

The addition of bitcoin gold to the index forced litecoin down to sixth, despite the fact that its price has now risen to just under $90. The dash price posted a rare pullback following an extended rally, while the NEO price has set the $40 mark in its sights. IOTA clawed its way back into the top 10 with a 17 percent surge, and monero rounded out the top tier with a minor decline to $161.
Nevertheless, there is one more market achievement worthy of note. On Monday, the total number of “crypto unicorns” — coins or tokens that have market caps exceeding $1 billion — rose to a new all-time high of 15. Additionally, there are five more cryptocurrencies with valuations above $800 million, meaning that the billion-dollar club could be about to get significantly less exclusive.


Read More Read More, Posted by: stefanuspn
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BrianNovember 2, 2017
October was a huge month at SDF with the announcement of our partnership with IBM and KlickEx! We were overwhelmed by the encouraging words of community members around the world, and we are working around the clock to keep the momentum going with more exciting partnerships in the near future that will continue to strengthen and broaden the reach of the Stellar network.
As always, for current news and updates, follow us on TwitterFacebook and Reddit. We wish you a wonderful month ahead!

Feature Story

IBM and KlickEx Choose Stellar to Power the Future of Cross-Border Payments
Stellar is partnering with IBM and KlickEx to develop a blockchain-based cross-border payments solution proven to significantly reduce transaction costs and increase transaction speeds. This solution will help financial institutions and consumers eliminate inefficiencies and frustrations in current cross-border payment systems, including high fees, slow processing, error-prone transactions, and inefficient capital utilization.
[Read More]

New Partnerships

KlickEx is an award winning regional cross-border payments system delivering financial infrastructure for emerging markets. It has been responsible for dramatic uptake in digital financial services in unbanked regions of the world, and lowering costs for banks, central banks and consumers in low liquidity currencies.

Remitr is a global platform for cross border payments, licensed in Canada. Remitr uses the Stellar network for international settlements for businesses as well as other payment partners. Remitr’s own payout network of 63 countries, comprising several currencies, is extended onto the Stellar network.

Chaineum ICO Advisory Services 
Chaineum is positioned as the first “ICO Boutique” in France, providing a range of end-to-end services to companies and international start-ups wishing to develop with this new funding mechanism. Chaineum will use the Stellar network to support some of its upcoming ICOs.

MSewa Software Solution (MSS)
MSewa Software Solution (MSS) Payments provides a one-stop digital payment service available across the Globe. MSS Payments aims at serving the consumers (Banked, Unbanked and Underbanked) with mobile banking facilities on the move from anywhere by transferring funds in their mobile phone.

PesaChoice is a leader in international bill payment services for the African diaspora. PesaChoice aims at making international bill payment process easy, seamless, secure, with reasonable and competitive service fees, and up to date technological advances.


Webinar | Why Stellar Is An Ideal ICO Platform
In this 15min webinar, Lightyear’s Boris Reznikov discusses why Stellar is ideal for ICOs, gives a demo of the Stellar Decentralized Exchange (Stellar DEX), and showcases Bifrost (an ETH/BTC bridge). Part 2 of the webinar includes a brief video tutorial on how to issue tokens on Stellar.
The Smartlands platform is designed to create a new class of low-risk future-proof tokens, secured by real, profitable assets in agriculture. The Smartlands team aims to build appropriate infrastructure for ICOs of such tokens that protects investors from the major part of risks. ICO will start on 2nd November 2017 12:00 UTC+00:00 and end on 17th November 2017 12:00 UTC+00:00.

Mobius ICO starts November 8 — Whitelist Closing Soon 
We first wrote about Mobius in our July newsletter. Mobius aims to be Stripe for Blockchain by helping developers easily connect internet apps, devices, and real world data to the blockchain economy bit by bit. The Mobius token sale starts November 8th, 2017 but you can still join the pre-public sale by reserving a limited spot on the whitelist before it closes soon.


bext360 Announces Partnerships in Africa, Europe and North America
Bext360 this week announced two pilot programs with three partners in Africa, Europe and North America to produce the world’s first blockchain traceable coffee, as well as the use blockchain to trace payments made to coffee farmers.
[Read More]

Host a Stellar meetup!
Want to host a meetup in your city? We’d love to help you! We’ve put together a simple guide on how to get started as well as some other useful tips and resources to create the perfect meetup.

Got questions or need help? Feel free to contact us at
Give Feedback on projects for the Stellar Build Challenge
The 5th SBC is coming to a close on November 15th and we are calling on you, our community, to help them get their projects past the finish line by providing participants with your feedback and suggestions. Head here to check out the projects and leave feedback if you have something you want to share!

Developer News

Deadline for submitting your project for the SBC is November 15th
Quick reminder that the deadline for submitting your project for the 5th Stellar Build Challenge is November 15th. We are excited to see your final submissions!

Stellar is hiring!
Interested in working at We’re hiring for a variety of developer and designer roles. We don’t care about pedigrees but we do care if you are smart and can get stuff done. Be nimble. Be enthusiastic. We want spirited debates about how to build tools that will impact the future of money.
[Current Openings]


November 7th – Zug, Switzerland
Stellar meetup in Europe’s ICO capital! As more and more ICOs decide to incorporate in Zug, we’re hosting an event to discuss what makes Stellar a great alternative ICO platform, touching on both commercial and technical aspects. Event starts at 5PM!
[Event Link]

November 10th – Berlin, Germany
Stellar meetup with Tempo and a surprise guest in Berlin at TechCode on November 10th at 6PM. Join Boris of Stellar and Anthony Barker of Tempo plus a surprise guest as they discuss the Stellar Network, Stellar as the ideal ICO platform, cross-border payments and much more.
Stay tuned for RSVP details!

November 11th – Tokyo, Japan
Ella Qiang will be speaking at the Blockchain and Cryptocurrency Conference in Tokyo. More details on the local meetup coming soon!
[Event Link]

November 16th – San Francisco
Stellar meetup! Join us at 500 Startups where we will discuss ICOs and Smart Contract Misconceptions. Event will include a presentation from Lightyear’s Boris Reznikov, a lightning talk/panel and a night of networking. Tickets are free, but space is limited!
[Register Here]

November 29th – Singapore
Ella will be at Block Show Asia in Singapore, sharing Stellar’s solution on using blockchain technology in the cross-border payments use case.
[Event Link]

November 30th – Seoul, Korea
Ella will then head over to Seoul for the Inside Fintech Conference, where she will be participating on a panel about future of payments and a separate session on introducing the Stellar project to an audience of fintech leaders. Stay tuned for more details on the local meetup!
[Event Link]

Welcoming New Team Members

Tom Llewellyn-Smith, Developer
Tom Llewellyn-Smith is a Unix systems engineer specialising in large-scale distributed systems, configuration management and systems security. Prior to Stellar Tom designed and managed infrastructure for gaming, science and finance companies.

Stellar does not endorse any third party organizations that are named in this and/or any other communication(s). Please conduct due diligence and interact with these organizations at your discretion.[/size]

Read More Read More, Posted by: stefanuspn
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Stellar TeamOctober 15, 2017
Today we are excited to announce that Stellar is partnering with IBM and KlickEx to develop a blockchain-based cross-border payments solution proven to significantly reduce transaction costs and increase transaction speeds. This solution will help financial institutions and consumers eliminate inefficiencies and frustrations in current cross-border payment systems, including high fees, slow processing, error-prone transactions, and inefficient capital utilization.

Stellar’s technology serves as the core backbone of this cross-border payments solution. The Stellar network enables frictionless, scalable, and virtually-free cross-border payment transactions, and has been proven to be able to securely process over 1,000 transactions per second with a billion unique user accounts.

Having grown up in Oceania, Robert Bell, founder of KlickEx Group, has first-hand experience with the frustrations and inefficiencies of sending payments through underdeveloped payment corridors. He built KlickEx to meet critical remittance and foreign exchange needs in the region. Now, he sees promise in Stellar’s blockchain technology to revolutionize the remittance business by dramatically improving the cost and speed of transaction clearing, settlement, and compliance.

This cross-border payments solution is already processing live transactions in 12 currency corridors across the Pacific Islands and Australia, New Zealand and the United Kingdom. IBM has convened an initial group of diverse banking leaders as part of the development and deployment process, including Banco Bilbao Vizcaya Argentaria, Bank Danamon Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Kasikornbank Thailand, Mizuho Financial Group, National Australia Bank, Rizal Commercial Banking Corp. (RCBC) Philippines, Sumitomo Mitsui Financial Group, TD Bank, Wizdraw (HK) of WorldCom Finance, and other financial institutions.
“This new innovation and collaboration represents a significant milestone for Stellar as well as the financial technology industry as a whole,” said Jed McCaleb, co-founder of Stellar. “For the first time, public blockchain technology is being used in production to facilitate cross-border payments in multiple integrated currency corridors. Currently, cross-border payments take up to several days to clear. This new implementation is poised to affect a profound change in the South Pacific region, and once fully scaled by IBM and its banking partners, could potentially change the way money is moved around the world, helping to improve existing international transactions and advancing financial inclusion in developing nations.”

Stellar is excited to collaborate with IBM and KlickEx on the development and global implementation of this revolutionary cross-border payments solution.

Read More Read More, Posted by: stefanuspn
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BrianOctober 5, 2017
With September we saw the arrival of the Partnership Grant Program, the publishing of a white paper on ICOs in partnership with LHoFT, new partnership announcements and much much more….and October isn’t slowing down! This month’s newsletter features a ton of exciting news that came out over the past month with more updates on the horizon – so make sure you follow us on Twitter for the most up-to-date news and announcements.

Feature Story publishes white paper with Luxembourg House of Financial Technology (LHoFT)
Organizations have raised over $1.8 billion through ICOs since January 2017. As organizations continue to raise tens, sometimes hundreds, of millions of dollars in each token sale, it grows increasingly important for industry leaders, lawyers, policymakers, and academics to understand both the ICO regulatory landscape and the economic and technological attributes of the cryptocurrency and ICO space.
[get the white paper]

New Partnerships

Poseidon partners with to bring value to nature through carbon blockchain technology
Poseidon will simplify the carbon credit market with the creation of an ecosystem
built on’s blockchain technology. This technology will prevent double counting of carbon and will be consistent across jurisdictions, making it easier for companies to deliver and measure progress towards their climate targets or other goals such as deforestation-free commitments.


Accept ETH/BTC as Payment for Stellar-based ICOs
To support the increasing number of ICOs getting ready to launch on Stellar in the coming weeks, is releasing Bifrost, a service that enables token issuers to accept ETH or BTC as payment, in addition to XLM. Bifrost provides the investor with an ETH address, then automatically creates a Stellar address pre-populated with the correct number of ICO tokens upon payment, making ICOs on Stellar a seamless process for both investors and entrepreneurs.

Regulatory Strategy for Tokenization & ICOs
Regulation of initial coin offerings (ICOs) appears inevitable. How can businesses thrive in this developing regulatory landscape? This post discusses strategies and opportunities for those in the token ecosystem.
[Read on]


A Closer Look at the Winners of the 4th Stellar Build Challenge
Since launching last year, the quarterly Stellar Build Challenge has galvanized scores of developers from every corner of the globe to build their own applications atop the Stellar Network. To highlight some of the great projects that have been built for the SBC, we reached out to a just a few of the winners of the last SBC to discuss their projects.

QRYPTOS has added XLM
Lumens are now available for trading on (XLM) on QRYPTOS.

Developer News

Mobius: First major Token Sale on Stellar to hold Hackathon
The Mobius DApp Store Hackathon ends October 9th, 2017 judged by Jackson Palmer (Creator of Dogecoin) and the community. The winning submission to the DApp Store will win 50,000 MOBI. Mobius is building new standards to easily connect billions of apps, devices, and people to the blockchain ecosystem.

Announce your project by October 30th for the Stellar Build Challenge!
You have exactly 26 days left to announce your project for the Stellar Build Challenge! Already working on an idea? Announce it now so you can start getting feedback from both members of SDF and the community. We look forward to seeing what you’ll build for this next round!

Stellar is hiring!
Interested in working at We’re hiring for a variety of developer roles. We don’t care about pedigrees but we do care if you are smart and can get stuff done. Be nimble. Be enthusiastic. We want spirited debates about how to build tools that will impact the future of money.
[Current Openings]


October 10th – London
Lisa Nestor, Director of Partnerships, will be at the Global Money Transfer Summit in London participating on a panel about blockchain for money transfer.
[Event Link]

October 12th – Come meet us in London!
We will be hosting our first community meetup in London following our participation at the Global Money Transfer Summit. Join us for a pint or two and meet members of the team as well as other community members. We look forward to meeting you!
[Register Here]

October 16th – 19th: Toronto
We are heading to Toronto for Sibos 2017 in Toronto where we will be a panel speaker. In addition, we will also be hosting a Stellar meetup. More details on the meetup coming soon!
[Event Link]

October 22nd – 25th: Las Vegas
Jed McCaleb will be at Money 20/20 in Las Vegas speaking at a session about reimagining cross-border payments.
[Event Link]

October 23rd – 24th: Hong Kong
Ella Qiang, Director of Partnerships, will be speaking at the Hong Kong Fintech Week at the Hong Kong Convention and Exhibition Center.
[Event Link]


Mobius closes the gap between the internet world and blockchain world through innovative and simple protocols that introduce new standards for cross-blockchain login, payment, governance, and oracles.
[Current opening: Founding Engineer]

We’re building an exchange web app using the Stellar decentralized exchange as the backend. We plan on listing multiple altcoins and maybe even some ERC20 ICO tokens. We’d love to have developers who are familiar with Stellar and have a passion for front end development! Please reach out to:

Welcoming New Team Members

Nicolas Barry, CTO
Nicolas Barry joins the foundation as CTO. He is no stranger to Stellar as he designed and implemented parts of stellar-core, and will use his experience with large distributed systems to accelerate building the next iteration of our platform.

Tomer Weller, Developer
Tomer is a Maker and a Software Engineer. He recently graduated from the MIT Media Lab where he worked on 3d glass printing, systems for understanding visual media and fostering collaborations between makers and non-profits. Before MIT, he was a full stack developer and taught Android development. Tomer is passionate about Hummus, glass-blowing and LISP.

Jonathan Jove, Developer
Jonathan joins us as a core developer, bringing a decade of C++ experience to the team. Before joining, Jonathan worked as a quantitative trader.

Nikhil Saraf, Developer
Nikhil is a full-stack developer and joins Lightyear on the platform side. He most recently worked at Duetto, a dynamic pricing SaaS startup that is focused on the hotel industry. His past experience includes working at Salesforce, Amazon, and running his own mobile payments startup.

Lisa Kinard, People Ops
Lisa is our office Ninja as head of People Ops. Before moving into the operation side of things, Lisa worked on electronic commerce policy issues at two think tanks.

Stellar does not endorse any third party organizations that are named in this and/or any other communication(s). Please conduct due diligence and interact with these organizations at your discretion.[/size]

Read More Read More, Posted by: stefanuspn
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Lindsay LinOctober 4, 2017
Regulation of initial coin offerings (ICOs) appears inevitable. Over the past couple months, authorities from numerous jurisdictions have issued statements declaring that tokens may be subject to various consumer protection, anti-money-laundering, and securities regulations.

On the more extreme end, Chinese and South Korean authorities have made the decisive move to halt all ICOs. In the U.S., the Securities Exchange Commission (SEC) has issued an analysis deeming The DAO tokens to be securities, announced the creation of a Cyber Unit that will investigate ICO and blockchain-related misconduct, and charged two ICOs with selling unregistered securities and defrauding investors. These developments are a harbinger of future investigations, enforcement actions, and government policymaking.

These actions are warning shots for organizations who disregard regulatory requirements, defraud token buyers, manipulate markets, and misrepresent their business and/or technology. However, they also generate confusion and uncertainty for technology-focused builders who may inadvertently run afoul of regulations due to unfamiliarity with necessary requirements. Fortunately, there is a crop of emerging organizations that spot opportunity in this confusion and hope to assist entrepreneurs with compliant token offerings.

Betting on Compliance
The uncertainty and confusion surrounding legal and regulatory requirements has created an opportunity for companies to offer products and services that can hand-hold organizations through the legalities of token creation, issuance, and transfer.
In the U.S., many organizations are betting that regulatorily compliant token offerings will be the future. The following is a survey of current efforts and developments that help to facilitate compliant ICOs and tokenization:

SAFTs: In August, CoinList pioneered the Simple Agreement for Future Tokens (SAFT) as a tool to facilitate a compliant Filecoin token issuance. The SAFT is an investment contract security that was offered to U.S. accredited investors under Regulation D 506(c) for the Filecoin issuance. SAFTs operate similarly to convertible notes: if there is a network launch before the expiration or termination of the SAFT, the Company will issue tokens to the SAFT holder in proportion to the amount paid. The creators of the SAFT model argue that the SAFT approach is very beneficial for alleviating many securities, investor protection, consumer protection, money transmitter, and tax law and policy concerns.

Multiple organizations are currently exploring utilizing the SAFT approach for their ICOs in conjunction with Regulation D 506(c) offerings.
Security Token Launch Platforms: Companies are creating platforms that facilitate compliant security token issuances. Argon Group, an investment bank that has advised multiple high profile token issuances like Civic and Blockchain Capital, has developed TokenHub, a turn-key compliant token issuance platform that is currently launching approximately $50-$100 million security token ICOs such as Science (an incubator) and Protos Cryptocurrency Asset Management (a cryptocurrency hedge fund). Additionally, Polymath recently announced the creation of a security token launch platform that features built-in compliance templates, service provider advisory, and smart contracting technology that can streamline securities and AML/KYC compliance. Moreover, Jibrel Network recently raised $3 million to build out a platform to launch compliant security token sales via “smart regulation” in which smart contracts automate certain compliance requirements.

Existing crowdfunding players such as StartEngine are also exploring the tokenization of securities issued pursuant to SEC registration exemptions Regulation A+, Regulation D, Regulation Crowdfunding, and Regulation S.
Platforms and Exchanges for Tokenized Securities: Platforms that facilitate the exchange of security tokens could be subject to SEC regulations on securities exchanges, alternative trading systems (ATS), broker-dealers, transfer agents, and clearing agencies. After the SEC’s ruling that DAO tokens were considered securities, popular cryptocurrency exchanges such as BittrexPoloniex, and ShapeShift declared that they will examine listed tokens under the Howey test and delist probable security tokens to avoid violation of applicable security exchange laws.

In order to list security tokens, an exchange must qualify as a securities exchange or fall under an exemption. While becoming a national securities exchange is a long and resource-intensive process, there is an exemption for ATS’s operated by registered broker-dealers.
It’s unclear whether current popular cryptocurrency exchanges are willing to undergo the burden of registering as a broker-dealer and fulfilling the requirements of an ATS. The lack of a compliant security tokens exchange would decrease the transferability and liquidity of such tokens, arguably weakening one of the benefits to tokenization.

Fortunately, some blockchain organizations are already exploring broker-dealer and ATS registration, or acquiring and/or partnering with existing broker-dealers and ATS’s. For example, tZERO (a subsidiary of, RenGen LLC, and the Argon Group recently announced an exclusive joint venture to launch an ATS that will enable the trading of ICO security tokens in compliance with SEC and FINRA regulations. Additionally, blockchain asset management firm Templum and broker-dealer Liquid M Capital have also unveiled plans for a registered ATS that will facilitate ICO security token exchange and issuance. It’s unclear which security tokens will be listed on these two ATS’s, but the hope is that the list will be inclusive.

On a global scale, Lykke appears to be making headway in obtaining multi-country authorizations to become a tokenized securities exchange. Lykke has already obtained Vanuatu’s Dealer in Securities license and claims to be exploring or in the process of becoming authorized as an EU broker, EU Electronic Money Institution, and UK Multilateral Trading Facility.

Decentralized Exchanges
While some community members have espoused the use of decentralized exchanges such as EtherDelta and 0x to trade security tokens, it is uncertain whether decentralized systems would escape SEC jurisdiction. If an organization controls the hosting, maintenance, and operation of a decentralized exchange protocol, this may invoke broker-dealer and ATS regulatory requirements. For example, some decentralized exchange systems may be analogized to Electronic Communication Networks (ECNs), where traders trade directly between themselves using computer-based systems that automatically match and execute orders. ECNs are classified as an ATS by the SEC and are required to be registered as broker-dealers.

Even if decentralized exchanges do not fit under any present regulatory framework, the SEC will likely take action to protect investors from unreliable and fraudulent security exchange technologies once transaction volumes escalate.
As the popularity of security tokens grows, there is significant opportunity for regulated players to enter this space.

Distributed Ledgers for Management Corporate Records: Publicly traded securities are making their way onto blockchains. On July 21, 2017, Delaware Governor John C. Carney Jr. signed an amendment to the Delaware General Corporation Law (DGCL) that expressly permits Delaware companies to create and maintain corporate records, including stock ledgers, on a blockchain. Meanwhile, NASDAQ and other exchanges are testing blockchain based settlement for stock trading. The tZERO platform already uses a blockchain-based settlement system for transacting shares.

Distributed ledger technology can help automate many back-office functions involved in traditional securities transaction management. Distributed ledger technology improves transparency into share ownership, provides easy tracking of changes in the capitalization table, and facilitates fast transaction clearing and settlement. Moreover, distributed ledger technology could feature built-in voting and governance protocols that would help to remove middlemen in current proxy voting processes.

Future of Compliant ICOs
Given the trends towards compliant security token offerings and moving securities onto blockchains, there are promising opportunities in facilitating compliance. Indeed, the cryptocurrency community will likely witness these developments within the next couple of years:
  1. Growth of organizations that facilitate issuance and exchange of security tokens. We will see growth in the usage of security token launch platforms as new companies such as Polymath leverage compliance templates and adopt smart contracting technologies to help to enforce AML/KYC monitoring and transfer restrictions. As more securities are tokenized, there will be demand for SEC-registered ATS platforms that can facilitate greater liquidity for security tokens.

  2. Greater reliance on securities registration exemptions. In the U.S., organizations that are conducting ICOs will explore using Regulation A+, Regulation D (including SAFTs), Regulation S, and/or Regulation Crowdfunding to accomplish their goals. Each exemption features different restrictions and requirements; an organization will choose the one most suited to their philosophy and fundraising goals.

  3. Leveraging distributed ledgers for transacting registered securities. We will witness greater usage of distributed ledger technology to manage stock ledgers and perform settlements for existing and future securities.

  4. Legal standards for tokenized securities. Similar to how ERC20 provided standardized technical specifications for ICO tokens on the Ethereum blockchain, lawyers and policymakers may develop an open-source framework wherein different types of tokens are categorized and linked to corresponding legal and regulatory rights and obligations. This could lead to template compliance strategies that will highlight the rights, duties, obligations, and regulatory requirements of the token issuer and buyers.

  5. Development of compliance-automating smart contracts. Developers will develop smart contracts that will enforce certain anti-money-laundering and securities law requirements such as AML/KYC, transfer restrictions, whitelisting contributors, and automated reporting of suspicious transactions.

  6. Focus on market manipulation and insider trading. As security tokens become popularized, the SEC will likely focus more on market manipulation involving security tokens such as “pump and dump” schemes. In September 25 announcement, the SEC expressly stated its intention to investigate cases involving fraud targeting retail investors, including microcap pump and dump schemes. Tangentially, organizations that issue security tokens will have to be aware of potential insider trading violations.
Why Compliant Organizations Will Lead the Future
As more regulatory developments unfold, it is likely that many ICOs will suffer legal challenges to their self-proclaimed “non-security” status. Given the uncertain regulatory landscape, there are multiple benefits to presuming that one’s token would be categorized as a security.

Although creating a security token invokes additional restrictions and requirements, issuing tokens under a pre-existing regulatory framework significantly reduces legal risk. Compliant organizations have certainty that they will not suffer existential business interruptions from private litigation (e.g. right of rescission and the 10b-5 right of private action) and enforcement actions arising from unregistered securities offerings. Moreover, issuing tokens under existing securities frameworks helps to define token buyers’ expectations and rights, and could potentially result in higher investment returns.

Organizations have now raised over $2.3 billion through ICOs. ICOs are no longer a marginal, novel phenomenon that can escape regulatory attention.

As mainstream investment funds and retail investors start to enter the cryptocurrency industry, compliant organizations will likely be the ones to grab the most market share. Compliant organizations are the most likely to deliver easily accessible, stable, and secure services and products. Compliance processes ensuring consumer protection, investor protection, and anti-money-laundering will help distributed ledger technology and tokenization achieve sustainable mainstream adoption.

Many thanks to Terrence YangBoris ReznikovDavid Gobaud, and Brian Gale for reviewing and commenting on drafts of this post.
Lindsay Lin (@lindsayxlin) is counsel and program manager at, a company powered by Stellar. Lightyear helps institutions implement distributed ledger infrastructure to send payments across borders as easily as sending an email. The content in this post is offered as general legal information and does not constitute legal advice. Lightyear does not provide legal consultation services.

Read More Read More, Posted by: stefanuspn
[Image: Stellar_ICO_companie-1024x342.png]
Lindsay LinSeptember 19, 2017 publishes white paper with Luxembourg House of Financial Technology (LHoFT)

Organizations have raised over $1.8 billion through ICOs since January 2017. As organizations continue to raise tens, sometimes hundreds, of millions of dollars in each token sale, it grows increasingly important for industry leaders, lawyers, policymakers, and academics to understand both the ICO regulatory landscape and the economic and technological attributes of the cryptocurrency and ICO space. Even companies that are not directly involved in the blockchain space should be conscious of how ICOs and tokenization could be leveraged in multiple industries.

The Stellar Development Foundation (SDF) and the Luxembourg House of Financial Technology (LHoFT) have coauthored and published a 40-page white paper on initial coin offerings (ICO). The paper presents in-depth research and analysis in four areas: (1) the technical elements of ICOs, (2) the use-cases, benefits, and risks of ICOs, (3) recommended and forecasted regulatory actions, and (4) global regulatory developments. The paper combines both a regulator’s perspective (per LHoFT) and a technical and economic perspective (per SDF).
The purpose of this paper is to educate industry leaders, lawyers, policymakers, academics, and the general public on the characteristics, use-cases, and regulatory concerns of ICOs.

Key Takeaways:
  • The Technical Elements of ICOs
    • The paper provides a walkthrough of the ICO lifecycle and highlights technical attributes such as choice of issuance platform, token sale models, hard and soft caps, mining, and token owner distribution.
  • [size=undefined]The Benefits, and Risks of ICOs[/size]
    • There are multiple categories of tokens, each of which features different economic characteristics and regulatory implications.
    • ICOs galvanize open source project development, drive global financial inclusion, and reduce the costs of fundraising. The ICO model also generates built-in customer bases and positive network efforts for decentralized applications.
    • However, ICOs may feature a variety of risks, including risks to consumers and investors, market risks, and regulatory compliance risks. The paper features a table of ICO best practices that may help to alleviate some of these risks.
  • [size=undefined]Recommended and Forecasted Regulatory Actions[/size]
    • There are multiple legal and regulatory risks to ICOs. Regulators should not be hasty in imposing stringent regulations and should consider policies that maximize flexibility as the blockchain and distributed ledger industry matures and develops.
    • The authors propose the adoption of specific measures and approaches, such as regulatory sandboxes, self-regulatory organizations, and crossborder financial technology cooperation agreements, that would help policymakers achieve regulatory goals without undue impediment to innovation.
    • Blockchain and distributed ledger organizations should create a open line of dialogue with policymakers to promote mutual education and understanding.
  • [size=undefined]Global Regulatory Developments[/size]
    • The paper contains a survey of cryptocurrency treatment across the globe, including statements on ICOs from the U.S. Securities and Exchange Commission, Canadian Securities Administrators, Monetary Authority of Singapore, People’s Bank of China, Hong Kong Securities and Futures Commission, South Korea Financial Supervisory Commission, the Israeli Securities Authority, and the U.K. Financial Conduct Authority.

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JemayelSeptember 11, 2017
Since launching last year, the quarterly Stellar Build Challenge has galvanized scores of developers from every corner of the globe to build their own applications atop The Stellar Network. Entrants into the Stellar Build Challenge are guided by the team and community in the various community forums and Stellar Public Slack to bring their ambitious and creative projects to fruition, and the results over the past year have shown the real depth of talent in the Stellar development community.

With the 4th Stellar Build Challenge concluding in July, a total of over 149 million Stellar Lumens have been awarded so far to projects ranging from contract wallets to exchanges and trading clients, payment solutions, and ICO launches. As an open-source blockchain network built specifically for the frictionless transfer of funds around the world, a key factor in Stellar’s growth is empowering developers from all over the spectrum to utilize Stellar in building financial technology solutions with real world usability.
Here’s a closer look at just a few of the winners of the 4th Stellar Build Challenge.

Popcoin is a simple, streamlined metered billing app that allows employers and employees to execute payment contracts based on deliverables, time committed, and other forms of metered arrangements. Aimed at developers in this early stage, Popcoin is instantly applicable to an array of industries, and its lightweight design, low fees, and eye-catching aesthetic render it an excellent candidate for user adoption.
Popcoin is developed by Tyler van der Hoeven, Creative Director of Tiny Anvil and a Front-End Developer at Baremetrics, based in Kentucky.

How did the parameters of the Build Challenge affect the way you approached Popcoin?
The nature of the Build Challenge really facilitated keeping things simple, while ensuring the product was also still useful and usable. I find that the more time you spend thinking through a project before you ever get to a computer, the better the final project will be.

How do you envision the Popcoin project developing?
Once it’s possible to move money into and out of more bank and credit accounts through the Stellar network, Popcoin will be the first and really only in class for the service that it offers. Stellar is the future, which at times can make the present more painful and slow to get going, but with patience, apps built on top of cryptocurrency are setting themselves up for seriously big wins.

ToNaira is a remittance app built specifically to address the Nigerian market. Africa is the most under-served and over-charged remittance market in the world, and by using the Stellar Network to transmit value via the Stellar-based NGN—Nigerian Naira Asset— ToNaira can transfer funds at a fraction of a fraction of current rates, which can be withdrawn into Nigerian fiat Naira quickly and at minimal cost.
ToNaira was built by Gbolahan Onadeko, a Business Administration grad from Lagos and a self-taught developer….

What makes Nigeria in particular a good market for remittances on the blockchain?
Nigeria accounted for $35 billion USD sent to Africa in 2016, and it was all processed through non-blockchain remittance companies that charged up to 20% as a sending fee. It is a good market for a blockchain based remittance company like Tonaira, because we are able to cut costs to as low as 1%, and offer this service for far cheaper than the already existing services in place.

How did you benefit from building ToNaira with input from the Stellar community?
The Stellar community on Slack is like family, and people always take time out to help work through with whatever questions you may have. I was able to understand blockchain better, processes and how to kick off Tonaira in a short period of time, much thanks to Jed and the Stellar Community.

PapayaBot is a multi-currency wallet that enables users to trade digital currencies peer-to-peer within the resoundingly popular messaging app Telegram. By chatting with the PapayaBot within the familiar Telegram interface, users can store and trade tokens built on the Stellar Network, in addition to Bitcoin, and then promptly return to their running conversations, without ever having to leave the Telegram app.
PapayaBot was created by Sergey Yusupov, a cryptocurrency software engineer based in Sydney, Australia

What is your goal with PapayaBot?
Papaya is something I’ve wanted to build for years, but never had the time. My aim is to make a wallet with multi-currency support that’s easy to use, fast, and secure. The goal is to have peer-to-peer marketplace, similar to Localbitcoins, but for any currency.

Why did you choose Telegram and Stellar to work on in particular?
I chose Telegram because it’s my favorite messenger. It’s the most secure—maybe after Signal messenger—and has way more exciting features, and is more user-friendly than any other app. And because it has native clients, users don’t have to install yet another app. Using Stellar is the number one choice if you want to do cross-currency trading. It’s also cheap, open, and easy to use.

Lightweight and versatile, the multi-platform blackwallet is built specifically for Stellar Lumens, and can run on smartphones, tablets, computers, pretty much anything that can browse the web and run javascript. Further, there’s no installation or registration required, all you need is a secret key to log into your wallet, and you can hold multiple wallets at once.
Blackwallet is built by Alexi, an IT student based in France who has been holding Stellar lumens since 2014.

What would you say is the most remarkable difference between blackwallet and other wallets?
This is what I had in mind when developing blackwallet: making it as simple as possible while being powerful and having rich features. Although I’m pretty happy with what blackwallet is at the moment, I am by no means done with it—many updates are still to come!

How was it getting feedback from the Stellar community when developing blackwallet?
It’s motivating. I’ve spent a lot of time developing blackwallet, and it’s always good to know that you are not simply spending hours doing that for nothing. It’s good to know that what you are building is actually used and appreciated (or not!) by the community. It’s also a good way to know what features you should focus on, what features should be added or modified, or what aspects may be buggy, tricky, misleading, or missing.

An ambitious project based in Kampala, Uganda, eSACCO is a social banking app that looks to provide the advantage of traditional banking services along with an added layer of digital currency functionality to intended users, many of whom are unbanked. In addition to offering savings, loans, and currency storage, users can earn by holding ESDT—The eSACCO Dividend Token. The ESDT ICO launch is ongoing until the latter half of September, and is just one of a number of promising token generation events built on The Stellar Network.
eSACCO is built in partnership with Clic.World, and is headquartered in Kampala, Uganda…

What was one advantage of launching eSACCO on the Stellar Network?
It was just so easy! Not having to worry much about the technical aspect of issuing the actual token, we could spend all our time and effort on the business side. Issuing the token was actually a direct result of the encouragement of the Stellar community, and Tunde in particular, who recognized the potential of ICOs to raise investment for the large existing savings and credit cooperative sector. While it was something new for us, it was the help and support of the community that convinced us to take the first step, and they assisted us with practical advice the whole way.

How are attitudes towards digital banking and blockchain technology developing in Uganda and the surrounding region? 
Digital banking is the norm, with mobile money leading the way. Entries into the market like eSACCO, based on the Clic.World platform, are taking this to the next level with more services and products and driving the cost of transaction down. We see a large growth potential for blockchain based solutions over the next two years. There’s a huge appetite in general for anything new in the digital space here, with people prepared to try new innovations.

But the single biggest obstacle to a wider participation in crypto-asset that we face is our exclusion—as in most parts of Africa—from easy access to digital currency exchanges. At the moment, it is extremely difficult to get any kind of account opened at one of the major exchanges, and coupled with very limited availability of bank cards, makes participation in the emerging digital asset market something available to less than 0.01 of the population. So, yes, the appetite is certainly there, but access is very limited. We hope that Stellar will provide the opportunity for Ugandans to bridge this gap.

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BrianSeptember 8, 2017
School is back in session and summer is coming to an end (for most of us anyways). Don’t let end-of-summer blues get you down though because we have an action-packed newsletter for you! Read on to learn about the Stellar Partnership Grant Program, the next Stellar Build Challenge, new partnerships, job openings and more!

Top Stories

Announcing the Stellar Partnership Grant Program

We are excited to announce the launch of the Stellar Partnership Grant Program. This program will aim to promote the development of high-impact projects in the Stellar ecosystem. is accepting proposals from innovative organizations that are interested in building on the Stellar network to promote global financial access and inclusion, with a primary focus on Anchors (both fiat currencies and cryptocurrencies) and Exchanges. To incentivize our partners and reward network development, we will be granting selected partners up to $2,000,000 USD per grant (paid in XLM) to ensure that they are co-beneficiaries of network growth.
Learn More

New Partnerships
MicroSave is a leading international consulting firm that offers practical, market-led solutions focused on enhancing access to financial services to the low and middle-income segments. Our inspiration is to live in a world in which all people have access to high-quality, affordable, market-led financial services and other support they need.

Collective 21 offering community exclusive early access to their pre-sale
C21’s vision is to be the go-to platform for managing and trading all of your assets beyond just crypto, globally. They are offering the Community special early access to their pre-sale at $0.15 with no minimum through next Thursday at 11:59pm PST 9/14/17. (Actual pre-sale, min. $25k starts 9/15)

Rocksolve pre-sale ICO launches on 9/11 for their ROIN coin
Rocksolve is using Stellar to enable faster, quicker and more reliable payments (cross-border, micro and domestic), for geological services.

eSACCO ICO ends September 21st.
eSACCO is working to provide a social banking service to members while retaining the social values and advantages of a traditional savings and credit cooperative in Africa. The eSACCO Dividend Token (ESDT) is offered for sale on the Stellar blockchain platform direct from eSACCO and through Clic.World.

3 Common Misconceptions about ICO Law
In this post we help blockchain entrepreneurs better navigate this developing space by clearing up a few common misunderstandings surrounding the regulatory landscape.

Interview with Stellar Co-Founder and CTO, Jed McCaleb, on The Bad Crypto Podcast
New to Stellar or just want to learn more? Check out a recent episode of The Bad Crypto Podcast featuring an interview with Stellar Co-Founder, Jed McCaleb.

CoinSwitch.Co has added XLM
Lumens are now available for trading on (XLM) on CoinSwitch. Fast crypto market exchanges, no fees, and a simple process.

Results for the 4th Stellar Build Challenge
With the final SBC underway, we are excited to highlight the 23 participants that were awarded a combined 7.95 million lumens in the 4th Stellar Build Challenge! With over 40 entries this round, we hope the final SBC of 2017 will be our biggest yet.


Developer News
The next Build Challenge is here!
This year we have seen some amazing projects come out of the Stellar Build Challenge. We initiated this program to encourage creativity and development in the Stellar ecosystem and we have been overwhelmed by the amazing projects that have come out of the Challenge. We look forward to seeing what you’ll build for this next round!

Stellar is hiring!
Interested in working at We’re hiring for a variety of developer roles. We don’t care about pedigrees but we do care if you are smart and can get stuff done. Be nimble. Be enthusiastic. We want spirited debates about how to build tools that will impact the future of money. If you are interested, check out our current openings.

Dashboard Updates 
New additions include new distribution stats and monitoring for popular nodes uptime.

Events and Meetups
September 13th – Shanghai, China
Jed will be speaking at a panel organized by Cryptominded at the NakedHub in Shanghai.
Event Link

September 14th – September 16th – Shanghai, China
Stellar CTO and Co-Founder, Jed McCaleb, will be speaking at the Global Blockchain Summit in Shanghai, China this September.
Purchase Tickets

September 22nd – Nairobi, Kenya
Tunde Ladipo will be speaking at the IMTC Africa forum at the Crowne Plaza Hotel, Upper Hill, Nairobi. The IMTC conference will focus on international money transfers across Africa. Tunde will be discussing innovative ways of doing money transfers using the Stellar platform.
Purchase Tickets

Mobius closes the gap between the internet world and blockchain world through innovative and simple protocols that introduce new standards for cross-blockchain login, payment, governance, and oracles.
Current opening: Founding Engineer

We’re building an exchange web app using the Stellar decentralized exchange as the backend. We plan on listing multiple altcoins and maybe even some ERC20 ICO tokens. We’d love to have developers who are familiar with Stellar and have a passion for front end development! Please reach out to:

Summer might be at an end, but this fall expect more exciting news from the team at Stellar.

Team Stellar

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BrianSeptember 7, 2017

Today we are excited to announce the launch of the Stellar Partnership Grant Program. This program will aim to promote the development of high-impact projects in the Stellar ecosystem. is accepting proposals from innovative organizations that are interested in building on the Stellar network to promote global financial access and inclusion. To incentivize our partners and reward network development, we will grant selected partners up to $2,000,000 USD per grant (paid in XLM) to ensure that they are co-beneficiaries of network growth. Grants will be subject to a multi year vesting schedule based on achievement of milestones.

Anchors and Exchanges
The goal of this program is to encourage organizations to develop useful and high-impact products and services using Stellar technology, with the primary focus on anchors (both fiat currencies and cryptocurrencies) and exchanges.
We will read through each application and select winning partners based on the following high-level criteria:
  1. The partnership fulfills an important and unmet need in the Stellar ecosystem OR significantly improves upon an existing solution; and

  2. The team exhibits great promise in being able to successfully develop, deploy, and scale the technology.
For additional guidance and details on what we’re looking for, head to the Partnership Program page.

Other Proposals
We will also consider partnership proposals from NGOs, Fintech companies, and other organizations proposing projects that do not relate directly to anchors or exchanges, or teams working on the categories listed in the Stellar Build Challenge (SBC). We encourage interested organizations to present new, innovative, “outside the box” ideas or use cases that significantly enhance access to and/or functionality of the Stellar Network.

Getting Started
If you are interested in submitting an application for this program, the first step is to review all the details and guidelines on the Partnership Program page. This is where you will find:
  • Vesting/milestone details for Anchors and Exchanges

  • Evaluation process

  • Link to application form

If you have any questions about this program, please contact us at
We are excited to partner with you to expand the Stellar ecosystem!
The Fine Print

This partnership grant program is only available for residents in jurisdictions where the program is legally permissible. Program terms are subject to change at any time.
All participants will retain the intellectual property associated with their submission.

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Lindsay LinAugust 31, 2017
Recently, many blockchain companies have been exploring the use of initial coin offerings (ICOs) to raise funds to launch and grow ambitious projects. As a lawyer and cryptocurrency enthusiast, I’ve spoken to numerous Silicon Valley entrepreneurs about their ICO plans. My company,, has helped multiple blockchain entrepreneurs integrate with the Stellar ecosystem for their token infrastructure needs. We hope that the recent torrent of innovation in the blockchain and distributed ledger technologies will lay the groundwork for what could be the next generation internet.

ICOs have the promise to expand financial inclusion, generate built-in user networks, and spur extensive open-source development. However, companies should be aware of the regulatory and legal landscape so that they may proactively act to avoid future civil and criminal liabilities. During our discussions with ICO-curious companies, I’ve noticed that many founders share some of the same misconceptions about the legal implications of ICOs. In this post, I hope to help blockchain entrepreneurs better navigate this developing space by clearing up a few common misunderstandings surrounding the regulatory landscape.

Misconception #1: My token is a “utility token”. Therefore, it is not a security.
Reality: A utility token is a token that can be used to access a product or service. Some analogize utility tokens to gift cards or software/network licenses, which are not traditionally considered securities. The value of a utility token theoretically derives from its consumptive use.

If a token has a significant utility in the operation of the application, it may be less likely to be considered a security (since this characteristic may help the token to fail the Howey test, as discussed below). However, be wary of umbrella statements that “utility tokens are not securities.” The reality is that utility tokens can indeed be considered a security under the definitions set forth in Section 2(a)(1) of the Securities Act of 1933 (1933 Act) and Section 3(a)(1) of the Securities Exchange Act of 1934 (1934 Act). The fact that a utility exists is not determinative in determining whether the token is a security. If it were, we’d get an absurd result: any offering could escape securities law jurisdiction simply by building in a trivial utility to the token. Imagine a tokenized share of stock, except the token also enables you to redeem it for a cat GIF.

Until the SEC delivers on-point guidance through rule-making, no action letters, interpretative releases, or more, no one can say for certain that utility tokens are not securities. The most likely outcome is that some types of utility tokens are securities, and some types are not, evaluated on a case-by-case, fact-based basis.

Misconception #2: My token didn’t meet the definition of a security under the Howey test. Therefore, it can’t be a security!

Reality: The threshold question is whether a particular token would be considered a security under the 1933 Act and the 1934 Act. If the answer is yes, the token may be subject to various SEC registration, exemption, sale, transference, and reporting requirements.
Section 2(a)(1) of the 1933 Act and Section 3(a)(1) of the 1934 Act enumerate multiple instruments that are considered securities. The definition of security includes notes, stock, security futures, swaps, bonds, debentures, options, investment contracts, and more. The “investment contract” phrase has acted as a catch-all phrase to encompass innovative financial arrangements that have the spirit of a security, but may not meet the description of the enumerated instruments.

Applying Howey’s 4-Factor Test
In SEC v. W. J. Howey Co. (1946), the U.S. Supreme Court provided a four-part test for whether an arrangement constitutes an “investment contract”. The test checks whether there is (1) an investment of money (2) in a common enterprise (3) with an expectation of profits (4) which are derived solely from the efforts of the promoters or third parties.
The idea that utility tokens may not be considered securities arises from the thought that if a token has a utility, then any expectation of profit would derive mainly from the token’s consumptive value, not on the efforts of third parties. Therefore, the fourth factor would fail, making the arrangement not an investment contract. Marco Santori from Cooley provides a more in-depth analysis of Howey for tokens here. Coinbase, Coin Center, Union Square Ventures, and Consensys have also built-out a thoughtful securities law framework to test whether a token may be considered a security.

While the Howey test is relied upon to judge whether an arrangement is an investment contract, Howey is not the end-all-be-all test to check whether a token is a security. A court may choose a different test.

Applying Reves’s Family Resemblance Test
A separate securities test is the Reves “family resemblance” test from the 1990 U.S. Supreme Court decision in Reves v. Ernst and Young. The Reves test articulates four factors to determine when a note, one of the enumerated categories of securities in the 1933 and 1934 Act, should be classified as a security.

In Reves, the default presumption is that a note is a security, but this presumption could be rebutted if it bears a “family resemblance” to one of the enumerated categories on a judicially developed list of exceptions. The Reves test considers: (1) the parties’ motivation for entering into the transaction, (2) whether there was a trading market for investment in the instrument, (3) the expectation of the investing public, and (4) whether there are other regulatory schemes applicable to the instrument that could reduce risk to the buyer. Based on this test, the court determines whether a note resembles an excepted non-security note and is therefore not a security.
While Reves applies to notes, the same judicial rationale could be extended to other enumerated categories of securities. The Howey and Reves tests could both be applied — for example, even if a token is not an investment contract under Howey jurisprudence, it could be considered a security under Reves. A token issuer should be mindful of how Howey and Reves may apply to its token.

Applying the Risk Capital Test
Token issuers also have to consider securities regulation beyond the SEC. Issuers who distribute their tokens all across the U.S. may have to comply with each state’s securities regime (i.e. “Blue Sky” laws). This means a token that is beyond the jurisdiction of the SEC may still be subject to securities regulation by one or more of the states.
States may use different frameworks to judge what constitutes a security. For example, courts in California, Arkansas, Michigan, Washington, Oregon, and other states have instituted a “risk capital” test. In California, the risk capital test considers whether there is attempt by an issuer to (1) raise funds for a business venture or enterprise (2) through an indiscriminate offering to the public at large, (3) where the investor is in a passive position to affect the success of the enterprise, and (4) the investor’s money is substantially at risk because it is inadequately secured.

Using this test, the California Supreme Court found that country club memberships were securities in a landmark case called Silver Hills Country Club v. Sobieski (1961). In this case, an organization attempted to finance improvements on a country club by selling club memberships. The membership did not entitle the holder to any share of profits — it only enabled the holder to use club facilities. The court held that courts have to look through form to substance to protect the public from schemes to attract “risk capital” with which a company can develop a business for profit. The purchaser has to contribute capital in a high risk project for there to be any chance that the benefits of club membership will materialize.

A state that uses the risk capital test may apply it in conjunction with Howey. A transaction is considered a security if it satisfies either test. Given that many token issuers are raising funds from the general public for business ventures in which passive investors contribute capital to help materialize a risky product, the risk capital test may be applicable in many circumstances.

Misconception #3: I’ve been assured by the best law firms that my token will not be considered a security subject to U.S. federal and state securities laws. I can now do whatever I want.

Reality: Beyond U.S. securities laws, there are multiple other areas of law that must be considered for a token sale.
Three key considerations are tax laws, consumer protection laws, and anti-money-laundering laws.

If a token is not considered a security, then the revenue generated from the token sale may be considered taxable revenue. This has been one of the key motivators of structuring offshore foundations to be the token issuer — offshore foundations may not be subject to some taxation requirements.

Consumer Protection
Token issuers who make misleading statements may be liable for breach of contract, false advertising, and fraudulent or negligent inducement, to name just a few claims. On the federal level, the Federal Trade Commission could investigate an organization for unfair and deceptive advertising (e.g. lying about the scope or character of the products and services promised in an ICO campaign).
On the state level, states have differing consumer protection regulatory regimes. For example, some states require the organization to refund consumers if it isn’t able to deliver the product or service.

Anti-Money Laundering
The Bank Secrecy Act and its implementing regulations require Money Service Businesses to register with the Financial Crimes Enforcement Network (FinCEN). FinCEN has stated that “exchangers” and “administrators” in the virtual currency ecosystem are considered money transmitters (a category of Money Service Businesses), and are therefore required to register with FinCEN and comply with AML regulations.

By FinCEN’s definition, an exchanger of virtual currency is a person or entity that is “engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.” An administrator of virtual currency is a person or entity “engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.” Note that token issuers may fulfill the definition of an “administrator,” given that they issue a virtual currency, and may have the authority to withdraw their virtual currency from circulation.

While registration with FinCEN is quickly done through the bureau’s website, a company must assume the on-going burden of AML and know your customer (KYC) compliance programs, including collecting personally identifying information about customers, monitoring transactions, reporting suspicious activity, creating risk mitigation plans, and more. Moreover, most states require money transmission licenses to operate money transmitter businesses in-state (the definition of “money transmitter” differs across states). In some states, it can be very resource-intensive to obtain a money transmission license (e.g. New York).

Industry-Specific Regulations and Global Regulatory Regimes
Beyond taxes, consumer protection, and AML, each token issuer has to consider the legal implications of their underlying business. For example, an organization that issues a token that can be used to “win” an award may be subject to gambling regulations. An organization that transmits personal data across a blockchain may be subject to various privacy laws. All these must be considered.
Beyond U.S. laws altogether, the token issuer may be subject to the regulations of many, if not all, of the countries where its token holders reside. Each country would have its own regulatory scheme for securities, tax, consumer protection, AML, and more.

Innovate! But Tread Carefully
The legality of token sales is a complicated question with multiple dimensions for consideration. DIY lawyering in this space is not a wise decision. A good lawyer would be able to help you assess what and how legal frameworks may apply to your organization’s operations and needs. Moreover, a lawyer would be able to help assess the risks of prosecution and help craft a regulatory strategy. Law firms like Cooley, Perkins Coie, and Morrison Foerster have been leaders in this space.

Despite current regulatory uncertainty, I’m excited about the recent surge of innovation in distributed ledger and blockchain technologies. I believe that sustainable growth in this space will require the community to respect the intent of regulatory schemas and comply with necessary regulations. At the same time, the community should advocate for necessary change and self-regulate in areas where there are significant risks of public harm that have not been addressed by current law.

Best wishes to all blockchain entrepreneurs! Whether you’re considering an ICO or you’re interested in building out cryptographic token infrastructure for your business, please contact the team at if you’d like to discuss how Stellar technology can help you launch secure and production-ready token infrastructure.

Lindsay is a counsel and program manager at, a company powered by Stellar. Lightyear helps institutions implement distributed ledger infrastructure to send payments (and other transactions) across borders as easily as sending an email. The content in this post is offered as general legal information and does not constitute legal advice. Lightyear does not provide legal consultation services.

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BrianAugust 21, 2017
Thank you to everyone that participated in the 4th Stellar Build Challenge (SBC)!
We would also like to thank all of our community members who took the time to provide feedback for all of the submissions. Your ongoing feedback during the development stage is an invaluable component to helping developers get their projects past the finish line.
After reviewing more than 40 submissions, our judges have awarded 23 participants with 7.95 million lumens. Below is a breakdown of all the submissions that received awards. We encourage those of you who did not receive awards this time to continue to improve your project and submit for the next round!
For the final Stellar Build Challenge of 2017, we will follow the same interactive format where you will be required to announce your project prior to final submission (dates below).
Key Dates for final round of 2017:
October 30th: Announce your project
November 15th: Final submission date

Get all the details for the next Stellar Build Challenge here.

Popcoin is a usage based billing service built to be the fastest, easiest and simplest way to get paid for just about anything. Popcoin uses Stellar to create, move and manipulate tokens.

Papayabot is a peer-to-peer trading marketplace in the Telegram app to buy Bitcoins and other currencies.

Publicstellar allows you to list or create your own Asset/ICO token, search details of Asset and ICO tokens, do federation lookup and also read reviews about ICOs running on the Stellar network.

Chipper Cash
Chipper Cash is a financial platform that enables quick peer to peer transactions between people in developing markets.

Stellar PHP API
The Stellar PHP API is for communicating with the Stellar network and signing transactions. Bank Anchor Bank is a group of anchors and a franchise group that deals and distributes in THB, USD, BTC, ETH, XLM and soon many other assets all over the world.

Remittance App
ToNaira is a remittance web app that allows end users to easily send money to Nigeria with a credit card or Account as well as to USA, Thailand and China by making cash deposit or using a debit card.

BlackWallet is an easy-to-use multiplatform web Stellar Lumens wallet. It is an enhanced account viewer as it doesn’t require users to create an account – all you need is a private key.

Lobstr is an advanced platform for managing Stellar cryptocurrency in the market. It is available as web, iOS and Android applications.

Stellar Desktop Client
The Stellar Desktop Client is an open source desktop client. It allows you to encrypt your secret key and store it as a file locally on your computer. Easily trust, send, and trade all within the client.

Saza Wallet
Saza Wallet allows you to manage your lumens easily. It supports all the Stellar operations: multiple stellar accounts, sends lumens to emails, create assets, and supports 2-factor authentication.

The Stargazer Wallet is a mobile/desktop wallet for the Stellar payments network.

Luuun is local lumens made easy. Built on Rehive, a platform for launching and managing payment applications, Luuun is a web wallet that supports federation.

Vega Stellar Wallet
The Vegas Stellar wallet allows you to easily manage your lumens in an easy-to-use interface available for Windows, Android and Linux.

eSACCO was created in partnership with the team to provide a fully functional social banking service to members while retaining the social values and advantages of a traditional savings and credit cooperative in Africa. The eSACCO Dividend Token (ESDT) is a tradable digital crypto-asset issued on the Stellar network.

GFT Network
GFT Network is a platform for e-gift cards built on the Stellar network. They offer comprehensive SAAS solutions and payment settlement for B2B and B2C business with unique conditions: no setup fees, commission-free, zero ownership cost. Learn more about their GFT token!

Trading Client
A web based trading client with full ability to interact with the Stellar distributed exchange. It aims to make it easy and safe for users of any skill level to trade on the Stellar network.

Lupoex is a trading client that connects to the Stellar exchange.

Graphite creates dynamically updated graphs of asset pairs that trade directly on the decentralized distributed Stellar network.

Stellar Crawler
Stellar Crawler is a PHP and JavaScript open-source API that can be used to navigate through the Stellar network.

Stellar news, community and announcements.

Moving Forward
We hope that the last Stellar Build Challenge of 2017 will be the biggest ever and we look forward to seeing all the projects as they are announced. Don’t forget to check out the SBC page for all the details.

Read More Read More, Posted by: stefanuspn


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