In a speech entitled “Age of Asset Tokenization: Decentralization vs. Regulation”, Tsai looked at developments in the crypto world and dealt with the challenges facing security tokenization. Tsai notes the US financial system, the world’s strongest centralized framework, is under heavy fire from the adoption of crypto currencies.
“Both the spirit and letter of US securities laws are outdated,” states Tsai. “We are going through a seismic shift that extends across the entire financial industry. This will disrupt the existing oligopoly of financial institutions in banking, securities and fund management sectors. Regulators must rise to the occasion.”
China & Asia Dominance
The disruptive trend of crypto currencies and STOs is accelerating. This new era in financial services is fueled by technology-led, self-regulated STOs and other innovative financial services. In this climate, Asia leads the way, due to the size and growth rate of the market, as well as rapid application of blockchain and AI technologies combined with looser regulations to access world markets via the Internet.
Known as the “King of the Shells” for creating 101 public shell companies at the turn of the millennium, Tsai has a deep background on Wall Street. Tsai believes that China and Asian markets will lead the security token exchange business. Though banned on the Mainland, offshore Chinese exchanges are world leaders in the crypto currency exchange space and plan the same for STOs.
“As we enter a new decade, do not be surprised to see the largest STO exchange in the world based in Asia or China,” predicts Tsai. “The key to this evolution is the decentralized exchange. Currently, most crypto exchanges are centralized. They do not provide the security benefits of decentralization and this is not in keeping with the crypto culture.”
Regulatory Dilemma
For an STO to comply with US securities law the process is simple. The issuer must either file a public offering registration or rely on exemptions to sell securities. The complicated part is secondary market trading that limits shareholder ability to transfer or trade restricted tokens between accredited investors. Other trading issues include globalization in exchange trading, off-exchange peer to peer OTC trading and enforcement capabilities against offshore operators.
“In this archaic framework non-accredited investors are not allowed to invest in new ventures. This does not make sense,” explains Tsai. “It is ironic that these same regulators have no issue for these same investors to lose all their money at the casino or horse track!”
Speech links:
Aaron Tsai’s keynote speech: https://admin.udax.kr/upload/masex.pdf
Opening video to the keynote speech: https://drive.google.com/uc?export=download&confirm=VZbu&id=1ZRRI-4tgUs7cf0MxhzaWCwWursMLMveb
About MASEx
Founded in 2018, MAS Capital Universal Exchange Inc. (MASEx) aims to become the world’s leading security token exchange. MASEx deploys market leading AI and blockchain technologies to form a decentralized exchange to trade securities, commodities, Forex and digital assets. The multi-tiered MASEx Stock Listing Entry Board plans to list 11,000 securities tokens within the next three years. For more information please visit: http://www.masex.io.