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- 💅 The SEC is keeping up with the Kardashians
💅 The SEC is keeping up with the Kardashians
🏦 The institutions are coming...
Jonah Schulman
October 10, 2022
The Security Token Market's first-of-its-kind Web3-enabled crowdfund on the Avalanche blockchain continues to trek on! 🔺
In fact, 87 people from 14 different countries and 5 continents have invested!
Gooood morning, Rainmakers! ☀️
As always, I have two captivating topics for you to dive into:
1️⃣ 💅 The SEC is keeping up with the Kardashians: The SEC has charged Kim Kardashian 7 figures over unlawfully touting a crypto! Which one?
2️⃣ 🏦 The institutions are coming: KKR announced they are tokenizing their fund and now another major institution firm is doing the same! Who?
Without further ado, it's time to…
Get liquid 💧
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💅 The SEC is keeping up with the Kardashians
Long story short, Kim Kardashian, the mega influencer, has agreed to pay the SEC $1.26 million for unlawfully promoting the crypto security, Ethereum Max (EMAX).
I have a couple of thoughts on this.
Firstly, since when are we calling cryptocurrencies securities? The headline directly from the SEC directly states "Crypto Security"
In the current SEC's framework, there is no explicit distinction on what constitutes a security in the cryptocurrency realm..
Secondly, the decision to target Kim Kardashian of all people was clearly to send a message to the greater population and to celebrities that this kind of promotion will not be tolerated.
But, I ask you, Commissioner Gensler, "What the heck is a crypto security?" You can't just fine a popular influencer for promoting a cryptocurrency when there is no framework discerning what a security is.
My guess is that Gensler would reply to that statement with "The law is clear, Jonah."
and I'd reply with, "Yes and no, the law is clear from 1933, but there is an immense nuance that you need to clear up and define before more people get hurt and you keep fining people for rules that aren't clear."
I am getting tired and sick of it, to be honest.
On the other hand, for those that are tokenizing pre-existing securities, it seems to be working out quite well... ⬇️
🏦 The institutions are coming...
Who would have thought the slowest-moving, most bureaucratic, conservative financial institutions would be making this much noise in the blockchain space??
Just a couple of weeks ago, one of the largest PE firms in the world tokenized one of their funds and now this week another one by the name of Hamilton Lane did something similar.
Tokenization enables more and more people to get exposure to investment deals that are sometimes harder to qualify for.
For example, the three funds that are going to be tokenized on Hamilton Lane are traditionally exclusive for institutional investors or the UHNW (Ultra-high-net-worth individuals with at least $30M in investable assets), but now the requirements are going to be greatly reduced - opening up these deals to a much larger investor base.
The FOMO is beginning to kick in and it looks like more and more institutions are going to be following suit.
I mean why wouldn't you want to open the doors a little bit more if that means these funds and corporations could increase their AUM.
These Hamilton Lane feeder funds will offer exposure to direct equities, private credit and secondary transactions, and should be available as soon as Q4 of this year!
Any predictions on which institution will be announced next?
💦 What else is Drippin’
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Everything in this report is for informational and entertainment purposes only. Nothing in this report should be taken as financial advice or as an inducement to purchase or sell any security. Nothing in this market report should be used as legal advice. Always do your own research before making any decisions regarding financial transactions of securities.
Private market investments are speculative and considered risky, including the potential loss of your investment, and may not be appropriate for every shareholder. Private investments are generally an illiquid asset class; shareholders cannot sell their funds when they want to without potentially facing high losses. Any discussion of liquidity is purely speculative. Past performance is not indicative of future results.
Crowdfunded securities are generally offered by early-stage companies and investors should be prepared to lose some or all of their investment. Investors should read all of the risks and disclosures prior to making any investment decisions. Securitize Markets is an SEC-registered broker-dealer, FINRA member, and operator of Securitize Markets ATS, and an SEC-regulated Alternative Trading System (ATS).
Carlos Domingo is a founder and general partner of SPiCE VC as well as CEO and Co-Founder of Securitize.