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.

The Relationship Between Cryptocurrency and Blockchain

The relationship between blockchain and cryptocurrency has been an area of increasing interest over the past few years. For those looking to use cryptocurrency or blockchain technology to transfer, store, and track data, understanding the differences between the two technologies is essential. Though they are related in many ways, blockchain and cryptocurrency should not be confused with one another as they are different. Knowing how to leverage each technology can help individuals make better use of these assets while avoiding pitfalls associated with a lack of knowledge. Those looking to invest in cryptocurrency or leverage blockchain should take the time to learn and understand the nuances of both technologies so that they can make informed decisions when it comes to utilizing these digital assets.


Cryptocurrency: Definition and Use Cases


Cryptocurrency refers to a type of digital asset designed to be used as a medium of exchange, a store of value, and a unit of measure. It is usually underpinned by blockchain technology, the use of advanced cryptography techniques for securing online transactions, and can exist either as a centralized token (one with a centralized issuer such as Bitcoin or Ether) or decentralized tokens (without a single issuer such as Libra or Ripple).


Cryptocurrency is gaining traction around the world, with its use cases ranging from being used to buy goods and services to savings and investments, to trading and speculation. Cryptocurrency is also being utilized in areas of financial inclusion, such as providing access to banking services and other financial products to those who lack traditional banking accounts.


Blockchain Technology: Definition and Use Cases


Blockchain is the underlying technology powering cryptocurrency transactions. It is a secure, tamper-proof, decentralized ledger system that allows for peer-to-peer transactions without the need for a middleman. It is also highly secure, as blockchain technology doesn’t rely on a single central authority or server to control and monitor its operations. Instead, it relies on a distributed network of computers to verify and validate the transactions that take place.


This technology is finding its use cases in many industries outside of cryptocurrency, such as healthcare, supply chain management, and real estate. For example, blockchain can help increase transparency and trust in these sectors by providing immutable records of all transactions securely stored across multiple nodes in a network. Such records can then be used to trace the source of a product, helping to ensure that it is authentic and untampered with.


Still, the relationship between blockchain and cryptocurrency does not end there. Cryptocurrency is actually one of the earliest use cases for blockchain, with Bitcoin being the first digital asset to take advantage of this technology in 2009. To this day, blockchain remains a key technology underlying most cryptocurrency transactions, allowing them to be securely transferred while avoiding double-spending and other fraudulent activities.


Similarities and Differences

While the two are not the same, blockchain and cryptocurrency do share some similarities. Both are digital assets, designed to be used as mediums of exchange and units of measure. They also both use cryptography for secure online transactions. However, there are notable differences such as blockchain being a distributed ledger system that is used to securely store and transfer data, while cryptocurrency is a digital asset designed to be used as a medium of exchange.


The relationship between blockchain and cryptocurrency is not always easy to understand. Though they share some similarities, they are two distinct technologies with different use cases. Blockchain is the underlying technology that supports cryptocurrency transactions, while cryptocurrency itself is a digital asset designed to be used as a medium of exchange and unit of measure. By understanding their differences, businesses and individuals can make more informed decisions when it comes to utilizing these digital assets.


Overdue Diligence: Examining the Cryptocurrency Industry’s Billion-Dollar Scandal

What would happen if inexpensive flying cars hit the market tomorrow? Wouldn’t it be great if you could just fly right over stop signs and red lights on the ground or avoid traffic jams? But soon there would be a disastrous crash, and authorities would ground everyone while they figured out what to do. Meanwhile, flying car owners would quickly learn that new technologies don’t make them magically immune to liability in tort and criminal negligence. In this scenario, flying car owners and the companies that manufactured them should have looked into air traffic laws that have always applied.


Something like this has happened in the cryptocurrency industry. Because cryptocurrency is so new, many people have assumed they were not subject to the traditional rules, a rich new area to be quickly exploited before the authorities showed up to rein things in. But there have always been laws to regulate it, which have gone ignored by those treating crypto like a modern-day gold rush. Many people have entered this space without a financial background, uneducated on the financial and securities regulations that apply in the space. Those with a financial background have perpetuated the myth that there is some gray area in which crypto operates and that securities laws don’t apply.


Even still, cryptocurrency has come a long way since the early days of Bitcoin. It has opened the door to a new form of digital asset that can be used for trading and investing, as well as providing an alternative to traditional fiat currencies. Unfortunately, the industry is not without its share of scandals, and one of the biggest to date involves the crypto exchange FTX. The collapse of FTX has caused ripples throughout the private capital market and highlighted just how important it is for companies to comply with securities regulations and for investors to properly vet their investments. 


Despite the alleged fraud occurring at companies like FTX, there are many in the space striving to build companies based on legitimacy, trust, and transparency. These companies are working hand-in-hand with the SEC and other regulators to ensure that investors and customers are protected and crypto evolves. As a result, we believe that the future will be dependent on trust and compliance, and only those essential components will allow this space to grow. 


The History of FTX


To understand the downfall of FTX, we must first take a look at its meteoric rise.


FTX was created in 2021 by Sam Bankman-Fried and its CEO Michael McCaffrey as an investment platform that allowed users to buy and sell cryptocurrency. The company quickly grew in popularity and established itself as a leader in the cryptocurrency sector. And shortly after its creation, the company began to receive attention from major investors such as the Royal Bank of Canada, Goldman Sachs, and Jefferies Group, quickly becoming popular among traders for its low fees and wide selection of cryptocurrency derivatives. It also launched an initial coin offering that raised more than $11 billion from investors around the world.


In 2021, FTX was one of the major sponsors for Major League Baseball, having agreed on a deal with the league to place its logo on the uniforms of umpires. The company also secured naming rights for the Miami Heat’s basketball stadium, renaming it FTX Arena, and sponsored the first season of MLB Home Run Derby X. The company also paid for high-profile, celebrity endorsements like Tom Brady, Shaq, and Shark Tank star Kevin O’Leary. However, FTX’s success was short-lived. In November 2022, the company abruptly announced that it had gone bankrupt and its assets were frozen. This news sent shockwaves throughout the cryptocurrency sector and led to many of FTX’s sponsors, including Mercedes-AMG Petronas F1 Team, TSM, and the Miami Heat, ending their partnerships with the company.


The United States House Committee on Financial Services also announced plans to conduct hearings in December 2022 into the collapse of FTX, with committee leaders seeking to hear testimony from Bankman-Fried. From its beginnings as a thriving startup in the cryptocurrency sector, FTX’s fall from grace was swift and sudden. The bankruptcy of FTX is a cautionary tale for those looking to invest in cryptocurrencies, as well as a reminder of the risks associated with these investments. Although many companies have made their fortunes in this fast-growing industry, it’s important to approach such investments with caution and do your research before making any decisions. As the fate of FTX shows, even the most successful companies can suddenly go under and investors can find themselves left with nothing but losses in their wake.


What Was Different About FTX?


FTX was far from the first crypto exchange, but it was widely seen as a legitimate entity by investors having established a positive reputation for itself and offering a wide range of services like spot trading, derivatives trading, margin trading, stablecoins, and decentralized finance products. FTX also had an innovative design that made it easier to use and had a wide selection of coins available to trade. At its height, the company was valued at over $32 billion in January 2022.


Unfortunately, some crypto companies have become complacent about following securities regulations. These crypto companies believe that because they are dealing in digital assets, they don’t need to follow the same rules as traditional securities. There have only been three companies, KoreChain, INX, and Coinbase, who have worked directly with SEC regulators to ensure that they are acting compliantly in this evolving space. These legitimate companies can continue transacting because they have shown that compliance is essential. 


When Did Signs Start to Emerge Something Was Wrong?


The signs that all was not well at FTX started to emerge in late 2021 when a series of lawsuits were filed against the exchange. These lawsuits alleged that FTX had committed fraud, and market manipulation, was operating an unregistered securities exchange, and were followed by reports of insider trading and other questionable activities.


The SEC has since accused FTX and Bankman-Fried of securities fraud and operating an unregistered securities exchange. According to the complaint, Bankman-Fried allegedly misled investors by failing to disclose that he was receiving payments from certain issuers in exchange for listing their tokens on the exchange. The agency further alleged that he had made false statements about the exchange’s liquidity and trading volume.


Furthermore, FTX was accused of failing to implement an adequate system for preventing market manipulation. The SEC also claimed that Bankman-Fried had personally profited from these activities by engaging in “wash trades,” a form of market manipulation that involves placing orders to buy and sell the same asset for the sole purpose of artificially inflating its price.


Crypto and Blockchain, what is the Difference?


With everything happening in the crypto world, it’s understandable the uncertainty that could creep into people’s minds. However, despite cryptocurrencies and blockchain often being confused to be the same, they are completely different concepts. Cryptocurrencies are digital currency that runs on a distributed ledger technology called a blockchain. It is a form of payment that can be sent and received worldwide, with no need for a third-party intermediary. In contrast, blockchain is a technology that enables the secure and transparent storage of data, with each transaction stored in a tamper-proof digital ledger. The recent FTX collapse has caused distrust in the crypto market, as questions arise about whether investments were safe. 


The news of the scandal and its effects has brought to light the risks associated with investing in security tokens, making many investors hesitate when it comes to getting involved. By taking steps to be trustworthy, companies can help restore public confidence in crypto and blockchain technology. In this way, the industry can benefit from a more secure and stable future.


What Does This Mean for the Private Capital Market?


The collapse of FTX is a wake-up call for the private capital market. Companies need to be more diligent in ensuring they are compliant with securities regulations and investors need to do their due diligence when investing in crypto companies. Companies need to have proper protocols in place to prevent fraud, market manipulation, and insider trading. Companies affected by the FTX collapse may also face increased scrutiny when seeking investments, as investors may be wary about investing in crypto companies.


Binance, for example, is currently facing potential charges of operating an unregistered securities exchange. If the SEC finds them guilty, they could face fines and the possibility of having their assets frozen. This could have a major impact on Binance’s operations and reputation in the crypto world. It’s also possible that other crypto exchanges could be targeted by the SEC for similar violations, creating more issues for the industry.


How will the SEC address crypto and blockchain moving forward?


With everything that has transpired, the SEC continues to actively monitor the cryptocurrency and blockchain space, seeking to protect retail investors from fraudulent activities. They have already taken active steps to ensure that companies operating in this sector are compliant with their regulations and have set forth guidelines for any security tokens issued through ICOs or STOs. Going forward, the SEC is likely to continue enforcing stringent rules to protect investors and ensure that companies are in line with their regulations regarding security tokens. As a result, companies will need to continue taking steps to be trustworthy and compliant. This means ensuring that their products meet high standards of security and reliability, as well as providing audit trails for all financial transactions conducted on the blockchain. 


Companies in this space must continue to be proactive about building and maintaining trust with their customers and ensuring compliance with SEC regulations. By doing so, they can help restore public confidence in crypto and blockchain technology and create a more secure and stable future for the industry. While this collapse is leading to mistrust in crypto, the blockchain technology that powers it is still safe and relevant. Used in all manner of private capital-raising activities, the blockchain still offers a secure and reliable platform for companies to use. By focusing efforts on maintaining compliance with the SEC and building trust with their customers and investors, companies raising private capital in this space can create a more secure future for themselves and help restore public confidence in the industry.


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.