The Origins of Blockchain

It’s been a little over a decade since Blockchain technology was first introduced, but it’s already revolutionizing the way we do business. By eliminating the need for a central authority in transactions, Blockchain enables secure and tamper-proof data exchanges between parties. This has allowed companies to improve productivity, reduce costs, and ensure accuracy in payments or copyright verification. Let’s explore how the Blockchain came to be.


A Brief History


  • 1979: Ralph Merkle, a computer scientist and Stanford University Ph.D. student, described a public key distribution and digital signatures in his doctoral thesis, an idea he eventually patented. This came to be known as the Merkle tree.
  • 1982: David Chaum, a Ph.D. student at the Univerity of California, Berkeley, described a system for maintaining and trusting computer systems.
  • 1991: Stuart Haber and W. Scott Stornetta proposed a cryptographically secured chain of blocks that would enable timestamping of documents, then proceeded to upgrade their system the following year to incorporate Merkle trees for more efficient document collection.
  • 2008: Someone under the pseudonym Satoshi Nakamoto conceptualized the first Blockchain, from which the technology has evolved and found its way into many applications, from cryptocurrencies to others.
  • 2009: Satoshi Nakamoto released the first whitepaper about Blockchain technology and Bitcoin, detailing how it was well equipped to enhance digital trust due to its decentralization aspect.
  • 2009: The first Bitcoin block was mined by Nakamoto, validating the blockchain concept.
  • 2011: Litecoin is released, becoming the second-ever cryptocurrency to be based on Blockchain technology.
  • 2013: Ethereum launches, introducing a whole new concept of smart contracts and dApps, ushering in the era of Blockchain 2.0.
  • 2015: The world’s first Blockchain-based stock exchange is launched in Estonia.
  • 2016: Hyperledger project begins to take shape with IBM leading the charge for private enterprises to adopt Blockchain technology for internal use.
  • 2017: Bitcoin experiences a monumental rise in price as the cryptocurrency market cap surpasses $100 billion.


The Benefits of Blockchain


Blockchain technology has a lot to offer from scalability and cost savings. Here’s how it’s been adopted in various sectors over the last decade:


Decentralization: A significant benefit of Blockchain technology is its ability to remove the need for a third-party authority. This means that transactions can be carried out securely with much faster processing times and lower costs. Utilizing Blockchain technology for payments and data storage ensures that the exchange of information is accurate, secure, and immutable.


Energy: Blockchain is being used to create decentralized energy systems that enable users to buy and sell electricity directly with each other without relying on any central authority. This helps reduce costs while providing more transparent financial transactions.


Finance: Banks, payment companies, and other financial institutions are embracing Blockchain technology to reduce costs while increasing the speed of transactions. Blockchain is also being used to enhance security in stock exchanges by providing an immutable ledger to track ownership of stocks and bonds.


Media & Entertainment: Companies like Spotify and Facebook are leveraging blockchain technology to explore emerging trends like NFTs. 


Supply Chain Management: By eliminating intermediaries, Blockchain technology makes it easier to track shipments and trace products in the supply chain. This not only enhances transparency but also reduces costs while improving customer service.


Healthcare: Blockchain technology can play a significant role in streamlining the healthcare industry by providing an immutable ledger to store and share patient records. This will help reduce costs and improve security as sensitive health data is securely stored on the Blockchain.


Blockchain technology has come a long way since its introduction over 10 years ago. What started as a revolutionary concept for cryptocurrency has now been widely adopted across various industries. The possibilities are endless and the future looks bright for Blockchain technology.  With its scalability, cost savings, transparency, and security advancements, Blockchain is set to revolutionize many aspects of our lives in the years ahead.

Genesis Global Trading Suspends Lending Services

Oscar Jofre joined FintechTV to talk about the Genesis Global Trading lending arm. Genesis Global Trading is a top investment bank in the crypto world. They offer services such as trading and custody. Recently, Genesis had to temporarily suspend redemptions and new loan originations due to FTX’s collapse.


Celebrity Endorsements of Investment Opportunities

When it comes to investing, celebrities are just like the rest of us. They need to do their research before putting their money into anything. Unfortunately, many stars have fallen victim to investment schemes in the past without doing the proper due diligence. However, an issue that is becoming even more prevalent is celebrities who use their influence and followings to promote securities, without including the proper disclosures, to unsuspecting fans and investors.  So, with the SEC cracking down on celebrities and companies, it’s important to know what you’re getting into when dealing with an investment opportunity tied to a celebrity endorsement.


Celebrity Endorsement and Investment Opportunities


The SEC’s Office of Investor Education and Advocacy (OIEA) has warned investors not to make investment decisions based solely on celebrity endorsements. While celebrity endorsements exist for a wide variety of products and services, a celebrity endorsement does not mean that an investment is legitimate or appropriate for all investors. As the OIEA says, “It is never a good idea to make an investment decision just because someone famous says a product or service is a good investment.”


Celebrities can be lured into participating in a fraudulent scheme or be linked to products or services without their consent. According to the SEC, even if the endorsement and investment opportunity are genuine, the investment may not be good for you. Before investing, always do your research, including these steps:


  • Research the background, including registration or license status, of anyone recommending or selling an investment through the search tool on
  • Learn about the company’s finances, organization, and business prospects by carefully reading any prospectus and the company’s latest financial reports, which may be available through the SEC’s EDGAR database.
  • Evaluate the investment’s potential costs and fees, risks, and benefits based on your personal investment goals, risk tolerance, investment horizon, net worth, existing investments and assets, debt, and tax considerations. 


Kim Kardashian and the SEC


The SEC’s announcement followed an investigation that found Kim Kardashian failed to disclose that she was paid $250,000 to publish a post on her Instagram account promoting EMAX tokens, a crypto asset security offered by a company called EthereumMax. The post contained a link to the EthereumMax website, which provided instructions for potential investors to purchase the tokens. Since the investigation, she has agreed to settle the charges and pay $1.26 million in cooperation. SEC Chair Gary Gensler noted that “investors are entitled to know whether the publicity of a security is unbiased,” and the SEC’s Director of Enforcement Gurbir S. Grewal added that “Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”


This case highlights the need for transparency surrounding celebrity endorsements of investments. Federal securities laws are clear that any celebrity or other individual that promotes a security must disclose the nature, source, and amount of compensation they received in exchange for the promotion. Without this type of disclosure, investors cannot make informed investment decisions. The SEC’s investigation is ongoing, and it remains to be seen if any additional action will be taken in this case. This case serves as a reminder that celebrities and influencers are not above the law. When considering any investment opportunity, it is important to do your own research and consult with a financial advisor to ensure it is right for you. Be sure to ask questions and demand transparency if you are asked to invest in a security based on a celebrity endorsement.

KorePartner Spotlight: Andrew Bull, Founding Partner Bull Blockchain Law  

With the recent launch of the KoreConX all-in-one platform, KoreConX is happy to feature the partners contributing to its ecosystem. 


During the capital raising journey, many components must be in place to increase the potential for success. One of these critical factors is ensuring that a capital raise meets regulatory compliance requirements. This means that having a knowledgeable securities lawyer on your team is vital to your capital raise.


Andrew Bull knows this as a founding partner of Bull Blockchain Law. He and the company assist investors and businesses by providing regulatory clarity across jurisdictions to ensure raises are compliant and efficient. Bull Blockchain Law is a blockchain and cryptocurrency law firm specializing in digital assets, broker-dealer services, FinTech, advising, and more, and is one of the few law firms entirely focused on this subject. 


Since discovering Bitcoin in 2011, Andrew has become an industry thought leader and ran one of the first cryptocurrency mining companies in the US. He began his firm in direct response to a lack of clarity around laws in the blockchain industry.


We took some time to speak with Andrew and learn more about himself, his firm, and his thoughts on cryptocurrency’s future.


Why did you become involved in this industry?

To provide legal clarity regarding the regulatory compliance requirements for accessing capital from all types of investors. The emerging world of Bitcoin and Cryptocurrency gives a new way to supply these things to the industry and assist a new style of investor.


What services does your company provide for RegA offerings?

Bull Blockchain Law provides legal guidance, document drafting, and regulatory filings to ensure our clients have the best possible chance to have their Reg A Offering approved by the SEC.


What are your unique areas of expertise?

Blockchain, tokenization of assets, NFTs, tokens, and any economic representation facilitated through digital issuances. My background in Blockchain includes extensive legal and academic experience, including running one of the first Cryptocurrency mining companies in the United States, which helps in the scope of legal expertise I can provide.


What excites you about this industry?

With the recent expansion of the fundraising thresholds in the U.S. and Canada, I’m excited to see the large influx of new projects access capital and provide more opportunities to retail investors.


How is a partnership with KoreConX the right fit for your company?

KoreConX leads the industry in practical compliant fundraising solutions. As a law firm, we emphasize compliance and regulatory compliant digital solutions that facilitate the most efficient path for our clients. Having this partnership undoubtedly benefits us as well as our clients.

What is an NFT?

A non-fungible token, more commonly known as NFTs, is a unique cryptographic asset that cannot be replicated and stored on a blockchain. By definition, fungibility is when an asset can be exchanged with more of the same good or asset–think of a dollar that can be easily exchanged into pennies or nickels and retain the same value. This means that by being non-fungible, NFTs cannot be traded or exchanged for an identical asset; one NFT cannot be exchanged for another NFT.

Throughout 2021, we have seen the meteoric rise in popularity of NFT, which can represent assets from artwork to videos and even real estate. In the case of artwork, it may be hard for someone to understand the value of buying a digital asset. The importance is ownership; the blockchain on which the NFT is stored verifies the identity of the asset’s owner in an immutable ledger. 

In the discussion on NFTs, it is essential to consider that not all digital assets are classified as securities. Based on the Supreme Court’s Howey case, the Howey Test helps determine whether an investment contract exists and is used to classify digital assets. With this test, an investment contract typically exists “there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.” If a digital asset meets these requirements and is classified as a digital security, it must be registered with the SEC or exempt from registration. With registration, issuers are required to disclose certain complete, non-misleading information to investors. 

If an NFT can meet the digital security requirements, they can be offered through raises that happen under exemptions like Regulation A+. NFTs are not bound by federal securities laws and pose a potential investment risk without meeting these requirements. 

What makes an NFT a good investment is its resale potential. If there is no market for the asset and it cannot be resold, it loses its value. It is not like other digital attests like cryptocurrencies, where one bitcoin is always equal in value to another. As the landscape of cryptocurrencies, NFTs, and digital securities continue to evolve, it will be interesting to see their role in the future private capital markets.


Understanding Digital Assets

There has been a lot of talk in recent years about crypto, tokens, blockchain, ICOs, STOs, Digital Securities, etc.  What does it all mean and why should you care?  In order to navigate the new financial digital world, it is important to first understand the terminology.  Below, I have broken down the typical terms being used in this current digital environment.   In certain sections, I have provided the example of the USA, and its primary regulator, but this is globally applicable.

Distinguishing the types of secondary markets or exchanges where you can trade digital or traditional assets also seems to be confusing.  I have created the following chart to try to distinguish these.

Now, why should you care?  What does this mean to you?  Despite what some people say in the press, blockchain is here to stay.  So understanding the types of digital assets that it hosts is going to be important in making business and investment decisions.

As a co-founder of a company that is focused on revolutionizing the private capital markets, I am not going to get into cryptocurrencies as this is not my area of expertise.  This is for currency experts to discuss.  Similarly, while I know the public listed markets well and how they operate, there are plenty of people who know these markets far better than I.

My background is geared towards the issues faced by private companies. Thus, I will elaborate on the fragmented ecosystem of the private capital markets that sorely need solutions.

Since the SEC and other government regulators around the world started stepping in to ban ICO’s, other alternatives have evolved.  The security token offering or STO is one such term that got some wings in 2018. However, the institutional and traditional investment communities were still leary of the idea of a token or blockchain solution being provided by people without an appropriate understanding of the entire market they are trying to disrupt. Many people from the ICO space were just changing the name and using STO as a new hype to sell the same ideas.

Many of the players (intentional choice of word) in the ICO space were trying to circumvent securities regulations saying they know better how the ecosystem should work.  After decades of scams, the securities regulators know that the current system has built-in checks and balances for a reason.  We all understand there are issues and inefficiencies in the private capital markets, but in order to change securities rules you better have a big budget and strong case for it. As an example, the JOBS Act took well over five and likely closer to ten years to come into place.  The use of blockchain has valuable applications that can certainly provide more efficient and cost-effective solutions to current private capital markets, as long as you work within the existing securities regulations.

There is a lot of exciting stuff being built with blockchain technology. I believe that if you are looking at this as a solution to the private capital markets, you need to consider a few things if you are looking at public chains as a potential solution:

  1. Use of private wallets for sole custody of financial instruments will not work. Securities law requires the use of transfer agents in many situations and transfer agents need to have custody of assets in order to manage them. If the digital securities are being held by individuals in their own wallet, there is no way the transfer agents can have custody of them. Think of public markets: you do not hold the securities (share certificates) yourself, they are digitally represented in your brokerage account and held by transfer agents.
  2. Mining of securities: It is generally not acceptable for unknown miners to verify transactions; even known miners must be eligible to perform business validation of a transaction either because they are parties to the transaction, have fiduciary responsibility, or certified subject matter credentials or otherwise registered and regulated entities.

Gas prices are not acceptable when it comes to securities.  In order for a token to move on some blockchains, a gas price needs to be paid to miners. Transaction fees must be contractually fixed in advance and cannot be uncertain or subject to an auction style of payment (which leads to a form of ad-hoc discrimination). For individual investors, transaction prices need to be certain  and follow execution guarantees.

Facebook’s Libra Reboots the Crypto World

Facebook Libra Project set’s to rebook the crypto world.

Since the announcement by Facebook of their Libra Project, everyone in the world came out with their take on what Facebook was up to. Thousands of articles and interviews with everyone jumping in. 

It’s safe to say that what Facebook has done, no other company has been able to do on a global scale and receive such global exposure. Today, the only places where crypto is discussed is Medium, Facebook, Twitter, LinkedIn, and the crypto rags. But now, we are talking about major global media exposure like CNN, MSNBC, Fox News, BBC, etc.

Facebook today has 2.4 Billion (Facebook, Instagram, Whatsapp) users that is 31% of the world’s population.

In one announcement, Facebook woke up every central bank, bank regulator, government, and various officials in the world. Now they can’t pretend they don’t know what crypto is and how it would impact them, a huge achievement by one of the most mistrusted companies in the world.  In one announcement, Facebook created fear most never thought possible in crypto sector. Facebook can overnight be the world’s largest central bank. Think about it.

The World’s Largest Central Bank!

The current turf wars that President Donald Trump is having with China, Canada, Russia, Mexico, France, and Denmark, just to name a few, would be put to a complete halt by one company, Facebook.  That is power!

The crypto sector’s hardcore evangelists see this as validation and are rooting for the rise in the price of bitcoin and other cryptos that nobody on earth knows what they are and have no value in the real world today.

Facebook Libra would bring it to real-world and make it usable instantly to 2.4 billion users globally. No other bank or country can pull off such a stunt.

Are you awake now!

What is the impact of LIBRA by Facebook.

Some are excited its validation. Some see it as a competitor.

Here is what’s going to happen whether Facebook launches LIBRA or not. 

Facebook can and will kill over 98-99% of the crypto companies around the world that have coins which are trading but have no real value.

This will be done in two ways:

  1. Facebook decides to abandon the LIBRA project for lack of regulatory support. This will create global uncertainty that start-up projects will face the same demise as Facebook.  Investors will be asking themselves if Facebook can’t pull it off, how is this new start-up going to accomplish it?
  2. Facebook is denied by regulators to proceed. This is the worst one of all.  Today, countries like Mexico, Indonesia, Nigeria, and more are shutting down companies in light of what Facebook has launched.  Facebook is a threat to central banks, governments, regional banks, and many others who will not allow them to proceed, forcing even those who are supportive of crypto to side with regulations to shut them down.  This is the killer if Facebook goes all the way only to be shut down.  

Either way, this is going to hurt a majority of the crypto players.

As I mentioned, Facebook did what no other crypto company has been able to accomplish:  woke up everyone and bring instant global awareness.

Even the hard supporters of crypto are now wondering, wait a minute, what would happen?

Facebook made the whole crypto business real overnight and now we have a really serious discussion. We got our wish: global awareness. Sometimes, you have to be careful what you ask for!

Yes, we all agree it would have been better if it was not Facebook, as the company faces fines globally for how they manage data, and featured in the latest 2019 documentary, The Great Hack, and how its platform was used to change the outcome of many governments, not just the United States.

Every government around the world is going after this company for its untrustworthy business practice, and then the company adds crypto to the mix just to complicate matters. There is a danger that Facebook could become a Fakebook.

They are the supervillain du jour of business.

Because of their size, they got instant global exposure and has put this at the highest ever scrutiny. So, the reality of crypto becoming what everyone hopes could finally come to a very hard stop.

Politically speaking, what is happening around the world is that every country is protecting its borders and citizens. Even crypto supporters in governments, regulatory agencies, and banks will take a step back.

What Facebook has now shown them is that any of these crypto players can become bigger than any one nation or any one bank.  So best to put the brakes now before it gets carried away.

So get ready for the Great Crypto Reboot.  And it will not look like what you thought!

Who do you trust with your Crypto?

The great thing about trustless cryptocurrency systems is just how many incompetents you have to trust along the way.” – David Gerard, author of Attack of the 50 Foot Blockchain.

Lately, I’ve stopped reading fiction because real life drama with public blockchains is way more entertaining. The fun never stops.

For example, one tragi-comedy began when the CEO of QuadrigaCX allegedly passed away a few months ago. Unfortunately, he never put the private keys to the company’s crypto millions into safe custody. In a traditional banking system, this would have been a mild inconvenience at worst, if even that. Bankers, like all humans, pass away, retire, or move on. When was the last time you went into conniptions because your bank manager quit?

The QuadrigaCX soap opera was just getting started. After going into regulatory protection (which in itself is a bit ironic for those “investors” who are using crypto as a statement against regulation), QuadrigaCX manages to lose some more by “inadvertently” transferring some money into another wallet from where the money cannot be retrieved. In the traditional banking system, when you sign up for direct deposit or do a wire transfer, considerable verification happens upfront to make sure the numbers and recipients are valid; further, both parties agree that deposits made in error can be reversed by the financial institution.

In another episode, Ernst & Young, appointed by regulators, discovered that six of the cold wallet addresses used by QuadrigaCX apparently haven’t had any balances in them since one year.

I realize many investors lost money in this and similar ventures when common sense suggests they should have stayed away. While this is unfortunate, I don’t believe these investors are ‘main-street’ investors, but reckless risk-takers for whom I have less sympathy. That’s why I’m looking forward to future episodes; this is entertainment at its best!

Public blockchains have been popularly known as the ‘trustless system.’ Strictly speaking, they should have been called ‘the system where you don’t have to trust authoritative institutions, government, central bankers, or any individual of the establishment’, though that lacks marketing pizzaz.

Instead of reposing trust in centralized institutions and in humans with traditional roles, public blockchains transfer that trust to the mathematical algorithms that power cryptocurrency operations such as mining.

Cryptography is an excellent trust mechanism and practically unbeatable, but only under specific conditions and only up to a point. Cryptography cannot undo the actions of those who operate crypto-exchanges, online capital-raising platforms, the crypto-majority (i.e., 51%, or whatever constitutes the quorum for making changes), the software writers, wallet makers, wallet operators, public addresses that are fronts for scammers, and so on. Most of these participants are not fraudulent, but that’s beside the point. Storing your life savings in Fort Knox is of no use if you lose your keys! To the end user, the effect of fraud, incompetence, or error in cryptos is the same and equally disastrous.

Traditional finance has a number of interlocked trust mechanisms: reputation, credentialing, registration, regulatory filings, auditing, established operational procedures, and various checks and balances. Does this make fraud impossible? Hardly. Does this prevent the consequences of incompetence? Not at all.

Fraud, incompetence, and mistakes are here to stay for the foreseeable future. In addition to all this, there’s technology risk. Generally speaking, it is very tough to eliminate risk entirely. The best we can do is to disperse the risk in a way that it becomes economically unrewarding to engage in criminal activity by the vast majority of participants. For the remaining risk that just cannot be eliminated (given the unending human penchant for mischief), the parties are protected through a variety of safety nets. As in all meaningful things, available trade-offs redistribute advantages and disadvantages. In the case of cryptos, the questionable advantage of censorship-resistance comes at the price of increased risk. Increased security in the case of permissioned financial blockchains comes at the price of complying with regulations.

In the real-world, trade-offs are unavoidable and blockchains expand the available trade-offs. Unfortunately, that includes the ability to choose to trust unsavory and incompetent participants at the entry and exit points of the public blockchain.

In securities, permissioned blockchains offer increased process efficiency, facilitate liquidity (but cannot create it), and enable stronger compliance across multiple participants. As far as securities are concerned, both types of blockchain offer strong cryptographic basis for technical validations. But you do have a choice. You can choose to trust that unknown participants are not out to scam you, CEOs have kept all private keys safely, no founder is going to perform an unorthodox exit, that transactions are meaningful (and not just the same scam artists moving stuff around continually to create artificial trading volume or manipulating prices), that miners will continue to mine and validate transactions even when crypto prices tank, that some miners won’t collude to obtain majority hashing power and create an adversarial fork (the new ‘F’ word in crypto-world), and that some dictator won’t fund a hashing takeover. You also have to trust the technology to scale properly and that it will continue to thrive and improve, and that the software programmers won’t make any major mistakes that will cause all your crypto to vanish into la-la land.

The alternative is to trust the verification of identities and KYC/AML checks, the registrations of broker-dealers and ATS operators (with SEC, FINRA, etc.), the registration of the transfer agent, money transmitter licenses, regulatory filings, securities lawyers (and their registrations and bar memberships), etc.

You actually can have both! Here’s how:

Public blockchain: Crypto Kitty

Permissioned blockchain: Family Kitty.

Now, was that so difficult?

The Right Technology – The Case of Mercury Cash

Nothing proves the wisdom of choosing the right technology for the right job than the case of Mercury Cash, a hosted-wallet solution for real-time liquidation and transfer of cryptocurrency and fiat assets. Recognizing the importance of being prepared for a new cryptoworld, Mercury Cash set out to explore various blockchain protocols to find the one that can stand the test of the real world.

The real world is full of messy complexities. We may think the mess is unnecessary and we should sweep it all away and usher in a new world order, but we do have to recognize that regulation and corporate law make it possible to protect investors and shareholders.

As someone pointed out regarding the tragic debacle of QuadrigaCX, Canada’s own Mt. Gox, “When was the last time your banker died and you lost access to your money?”

I’d add, “When was the last time you forgot your bank account password and your money became irretrievable?”

Can regulation and corporate legal processes be more efficient? Yes.

Are some of the regulatory requirements onerous or unnecessary? Yes.

But pretending that all regulation is unnecessary is like pretending that protections are unnecessary. Disruption with technology is good, as long as it doesn’t lead to destruction!

Click here to download Mercury Cash Case Study.

Many issuers are finding out the hard way two fundamental truths about how the real world works:

One, transactions don’t exist in atomic silos, least of all in securities; every transaction is connected with others and impacts multiple entities at various points in time in an ever-expanding ripple effect. One buy/sell securities trade requires validation of participants, ensuring protection for all parties, recording changes to captables, distribution of dividends, exercise of rights, filing reports, getting notifications of corporate events, voting, etc., all of it over a long time cycle.

Two, choosing a technology based on hype, popularity, and promise is not the way to go; instead, understand the characteristics of the problem and then identify the technology to solve it effectively.

In the case study, Mercury Cash describes the capabilities that will keep their business processes humming in a fully compliant manner. Most importantly, they found that ERC20-based protocols are inadequate for full lifecycle management of securities. This is not a knock against Ethereum, which is a fine platform for many types of DApps; much of the technology work is praiseworthy. But a Ferrari, no matter how shiny or powerful, cannot sail the high seas.

Many of our clients are coming to the same realization. Interestingly enough, a company could conduct its main business using public blockchain, while managing its security tokens on KoreChain. There is nothing wrong with that – it’s just like transporting a car on a ship. In many conversations with some of these technologists, I point out that the issue is not that ERC is inadequate for securities, just that it’s not the right tool. The same can be said if someone tries to use KoreChain for building cryptokitties.

When many companies are coming to us abandoning ERC20 protocols for various reasons, it validates our own approach to technology: first understand the problem you are trying to solve, then carefully pick the technology stack to solve it. In doing so, some of us have to leave our technology egos behind to move forward.

Click here to download Mercury Cash Case Study.