First-Ever SEC-Qualified Token Offering in US Raises $23 Million

Blockstack PBC, a decentralized computing network, announced that it managed to raise more than $23 million in the first-ever U.S. Securities and Exchange Commission (SEC)-approved token offering.

Participation from U.S. retail investors

Muneeb Ali, co-founder and CEO of Blockstack PBC wrote in a blog post on Sept. 10 that the blockchain-based startup Blockstack has raised more than $23 million in token offerings, which include its SEC-qualified token offering and its offering to investors outside the United States.

Retail investors in the U.S. were able to partake for the first time in a token offering qualified by the SEC. More than 4,500 individuals and entities participated. Investors included Union Square Ventures, Lux Capital, Recruit Holdings, Arrington Capital, Hashkey Group, Fenbushi Capital, Frontier Ventures and Spartan Group.

Ali wrote that, in addition to retail investors, attracting strategic investors from Asia was a key goal of the token offerings. He added:

“We are in discussions with international investors for an additional $5M+ which may be distributed in a separate private placement or in a follow-on SEC-qualified offering, as we have previously disclosed in our SEC filings. The goal of this additional distribution is to continue g

LG Confirms its Blockchain Smartphone Intentions

LG Confirms its Blockchain Smartphone Intentions 101
Source: Lg.com

Electronics giant LG has confirmed that it is considering the release of a blockchain-powered smartphone – confirming earlier reports.

Per a report from media outlet Fn News, an LG spokesperson stated, “We are preparing the necessary technology required to enable the use of blockchain technology on mobile phones.”

The media outlet also said that LG was “positive” about the launch of a blockchain-powered smartphone. LG’s fiercest domestic rival, Samsung, has already released a so-called blockchain phone this month – in conjunction with Kakao subsidiary Ground X. Some of the Samsung devices already support multiple cryptocurrencies and dapps (decentralized apps).

LG also spoke out on the subject of a recent patent application, lodged in the United States, for a cryptocurrency wallet named the ThinQ Wallet. The company stated,

“Patents are only lodged in order to preempt the market. It’s too early to predict to what extent the [wallet] will be implemented, or which devices it will be used in conjunction with.”

However, the wallet’s name is not insignificant. The company has released a range of flagship ThinQ electrical devices, many of which make use of smart and AI technology. And LG is thought to be keen to make up ground on Samsung, which incorporated a blockchain wallet feature on its Galaxy S10 device, unveiled in February this year.

Watch the latest reports by Block TV.

LG’s IT services arm, LG CNS, has already been working on a number of blockchain-related projects, including a mainnet and a token of some sort – in conjunction with KB Bank. LG and its subsidiaries al

Get Ready for a Blockchain Device Boom

Get Ready for a Blockchain Device Boom 101
Source: iStock/blueskyline

We are in for a blockchain device boom in the next five years, claims market research firm MarketsandMarkets in its latest report.

It finds that the blockchain devices market is expected to grow from USD 218 million in 2019 to USD 1.285 billion by 2024, at a compound annual growth rate (CAGR) of 42.5% in this time period.

When it comes to some of the major elements behind this growth, the report emphasizes:

  • increasing adoption of blockchain technology in retail and supply chain management
  • rising venture capital funding
  • growing market capitalization of digital assets
  • increasing acceptance of cryptocurrency across industries and regions
  • major companies launching various types of hardware
  • in Asia-Pacific, specifically, there are favorable economic condition and rise in demand for blockchain to be included in different applications
  • North America, specifically, is home to several blockchain devices vendors, contributing to the growth of the market in the region.

However, the report also says that “major factors restraining the market growth include uncertain regulations and compliances and lack of awareness.”

Watch the latest reports by Block TV.

Speaking of some of the major players in the blockchain devices market, MarketsandMarkets names companies from across the world, such as Ledger, HTC, Pundi X, Filament, SatoshiLabs, Genesis Coin, General Bytes, Riddle&Code, Sikur, and Sirin Labs among others.

The researchers analyzed the market by type, connectivity type, application, and region. It named North America as the region that will account for the largest market size in this 5-years period, while the U.S. accounted for the largest share of the market in that region in 2018. Asia-Pacific is in the second place, Europe in the third, and the rest of the world will account for the remainder of the market size.

The report concluded that wireless connectivity for blockchain devices will grow at higher CAGR during the forecast period (2019-2024), given that blockchain smartphones, point-of-sale (PoS) devices, and hardware wallet

Chinese Police Reportedly Close Office of ICO Startup

The offices of Chinese initial coin offering (ICO) startup GXChain have reportedly been closed by the local police.

On Sept. 11, Dovey Wan — founding partner of blockchain-based investment company Primitive Ventures — tweeted a photo of an office taped closed (presumably by Chinese police) and announced that GXChain “got clamped down by the Chinese police.” She also said that she believes the project to be notable and legitimate:

“GXChain was a very hot ICO back in the days with ATH market cap over $600M (even now still holds $48M) and considered to be among the very few legit ICOs.”

Photo of sealed office

Photo of sealed office. Source: Dovey Wan Tweet

GXChain’s business model a possible reason

In a subsequent tweet, Wan also suggests that the field in which the startup operates — selling processed personal credit data — may be the reason behind the closure. She said:

“I have no idea why the police took action against GXchain instead of 10,000 other Chinese scams, as GXchain has a real business behind. Th

Telegram’s TON Crypto Token to Be Listed on Crypto Exchange Blackmoon

Caymans Island-registered cryptocurrency exchange Blackmoon plans to list encrypted messaging app Telegram’s forthcoming Gram token via a partnership with Swiss crypto custodian Gram Vault. 

According to a Finance Magnates report on Sept. 10, Blackmoon — which was founded as a traditional financial products provider before launching crypto trading services — plans to boost liquidity by enabling users to purchase Gram tokens using bank cards.

Gram Vault claims its clients among biggest investors in Telegram ICO

By any stretch, Blackmoon is not a household name in the cryptocurrency space. Yet the clients of its partner for the listing — the fully regulated Swiss crypto custodian Gram Vault — were reportedly among the largest investors in Telegram’s $1.7 billion private initial coin offering (ICO).

The cooperation will, therefore, mean that Gram tokens will be transferred directly from Gram Vault onto the exchange, ensuring instant and deep liquidity for traders, the partners have claimed.

Ahead of Blackmoon’s listing announcement, Japanese cryptocurrency exchange Liquid had claimed it would be the representative of sales of GRAM tokens for Gram Asia — yet this announcement was later disputed by sources close to the Telegram.

Earlier this month, Liquid disclosed the public blockchain wallet address that now holds all participating investor funds from its own Gram token offering, in which the token was sold to investors at triple the original $1.33 sale price of Telegram’s second ICO round in March 2018. 

The token arms race

Recent reports indicate that Telegram is on track to launch its Gram cryptocurrency by October, following a process of planned public testing for its Telegram Open Network (TON) this month. 

If true, Telegram would beat Facebook’s much-anticipated Libra stablecoin, which is planned for integration into the social media giant’s three wholly-owned messaging services and would thus potentially have exposure to as many as 2.7 billion monthly

Crypto Exit Scams — How to Avoid Falling Victim

A couple of years back, the term “exit scam” became synonymous with the crypto industry. This was at a time when the market (at large) was replete with a number of cash grab ventures that looked great on paper but had little to no substantive value to back them up.

In its most basic sense, an exit scam can be thought of as a fraudulent scheme wherein the organizers of an initial coin offering (ICO) or a similar fundraising avenue disappear with their investors’ funds after acquiring a sizeable sum of money. 

In this regard, during November 2017 — a time when the crypto market was at its apex — the owners of an escrow-related crypto startup called Confido vanished overnight after acquiring a sizeable sum of $175,000 from their backers. As a result, the market capitalization of Confido’s associated crypto offering (under the ticker CFD) dropped from $6 million to a paltry $70,000 within the span of just seven days.

Related: What Are the Biggest Alleged Crypto Heists and How Much Was Stolen?

Other notable cases include Bitconnect and OneCoin, with the former probably being the most famous altcoin scam of all time. The aforementioned ploys each cost gullible investors in excess of $3 billion — with Bitconnect’s native token offering, BCC, even becoming a top-10 crypto in terms of total market capitalization. 

Hence, in order to gain a better understanding of exit scams and how best to steer clear of them, Cointelegraph reached out to Ben Samocha, the founder and CEO of CryptoJungle, a leading Israeli digital platform for how-to guides. According to Samocha:

“You can never know when it’s truly about to happen. For example with BitConnect if I had to bet, I would’ve said they should’ve exit-scammed way before the time they did.”

In regard to how investors can assess when an exit scam is about to go down, Samocha pointed out that it can be extremely useful for all stakeholders to actively pursue information related to the project (such as confirmations of partnerships, licenses, etc.) by following the company’s blockchain wallets as well as their media engagement levels. 

For example, if a project’s online media output suddenly starts to drop — or stops a month or two after its inception — this can be taken as a definitive sign that something shady is going on.

Obvious red flags to be wary of

The principle behind an exit scam is quite simple. First, the promoters launch or propose a new crypto platform that is based on a promising concept. Through an ICO, the organizers are then able to acquire a decent sum of money, following which, they proceed to make their getaway — thereby leaving their investors in the lurch. 

Along the way, there are usually a number of red flags that investors should keep an eye out for. Here are a few prominent examples:

Shoddy white paper

A lot of exit scams tend to feature white papers that are either under-researched or are of extremely poor quality. For example, they may feature full sections that have been directly copied from other established projects or come laden with a number of spelling mistakes and basic grammatical errors.

Unrealistic profit projections

Another surefire sign that a project is shady is if it makes bold, outlandish claims related to its financial returns. For example, upon its release, Bitconnect promised its core clientele a daily revenue stream of 1% — a figure that would eventually transform one’s initial $1,000 investment into a little over $50 million within a period of just three years. 

Related: Exit Scam in Wonderland: Bitconnect’s Tentacles From Texas to Gujarat

At the time, Ethereum co-founder Vitalik Buterin was highly critical of the project and called it a Ponzi scheme — and rightly so, because within a few months time (January 2018, to be exact), BitConnect closed down all of its lending and exchange services, which resulted in the project’s market cap falling from $2.7 billion in December 2017 to around the $17 million mark by the end of March 2018. On the subject, Samocha pointed out:

“Conduct proper due diligence, do not believe unsustainable false promises such as 6%+ profits guaranteed, look for the fundamentals and the proofs: they claim to have a partnership? Ask for transparency, approach the partner and verify it, etc. In addition, take extra care for MLM models that have several layers of profits (meaning, you gain commissions not from the people you recruit, but from their recruits as well).”

Team details

Back in 2017, a number of ICOs were able to raise substantial sums of money from investors, despite the organizers not providing any tangible details regarding the project’s key personnel. 

Not only that, a host of established ventures in the past have even resorted to buying likes, tweets and followers across various social media platforms to increase their online credibility. Thus, it is of utmost importance that people carry out their own research in regard to the promoters and backers of a particular ICO that they might be interested in. 

No working product

If a crypto project is backed only by a concept and not a working model, it is quite likely that the envisioned final product m