ICOs / token sales, as a mass phenomenon, are still a relatively new concept. Whilst individual investors, venture capitalists and some of the more visionary business types are running into the ICO space with unbridled enthusiasm, regulatory bodies are largely dragging their heels.
A whole new market of tokenized products and services are emerging as a result of the blockchain revolution and, as yet, there is no jurisdiction that provides a rigorously defined, formal and legal framework in which ICOs can operate without the sense of apprehension that comes with legal and regulatory ambiguities.
The GBX proposition is simple – the government of Gibraltar have made it clear that it is keen for the British Overseas Territory to become a hub of innovation and investment for blockchain technology.
One manifestation of this initiative is the DLT (Distributed Ledger Technology) framework – effectively a program conceived by the Gibraltar Financial Services Commission to issue licenses to qualifying blockchain start-ups to operate in its jurisdiction whilst enforcing compliance and quality assurance mechanisms to eliminate the risks that are so often associated with the current token sale phenomenon in its largely unregulated format.
As a result of this, the Gibraltar Stock Exchange (GSX) has set up a new subsidiary operation known as the Gibraltar Blockchain Exchange (GBX), which plans to provide a platform for the creation and management of both blockchain utility tokens and tokenised securities. GBX itself will be financed through an ICO / token sale fundraiser, the object of this review.
The white-paper points to the distinction between utility tokens: a kind of cryptocurrency which are specific to a given product and service, and tokenised securities: the digitial representation of some real-life asset such as a share or commodity like gold.
GBX – the Gibraltar Block Exchange – is conceived as the regulated marketplace for utility tokens, whilst GSX – the already-established Gibraltar Stock Exchange – will become the home for the island’s regulated marketplace for tokenised securities. Holders of tokenised securities will be expected to meet regulatory requirements at every stage of the trading process.
Both GBX and GSX plan to offer products and services that can be accessed through RKT (Rock Token). The products and services that will be offered by the GSX/GBX platform fall into one of three groups.
Firstly, a Services Division that offers, amongst other things, guidance in relation to regulation and compliance as well as more general advisory services. Really, what this means above all is the creation of an ICO launch-pad service. The services division will incorporate Juno Services, an existing advisory outfit acquired by the Gibraltar Stock Exchange on 30 November 2017, and whose operations will be expanded in the post-ICO period to incorporate specialised services for blockchain start-ups.
Secondly, an Exchange Division: this is simply a reference to the crypto-currency exchange that the project team intends to build. Listings will be rendered automatic for any ICOs / token sales which are organised through the services division. At the same time, the exchange, naturally, will continue to act as a platform for other tokens which have not launched on its own platform. The reference currency on the exchange will be the Rock token itself. Whilst the white-paper appears to make no specific mention to that effect, it is likely that the platform will incorporate trading pairs which use at least BTC and ETH as their base currency.
Lastly, an E-Money Division: our own interpretation of the white-paper is that this is a reference to wallet services. The white-paper could perhaps do a little bit better here in its description of this aspect of the proposal.
The GBX roadmap outlines four distinct phases laid out as milestones. The first two relate by and large to the obtention of operating licences and official incorporation of the various legal structures that define the business.
The third milestone relates to the GSX-side of the business (tokenised securities) which, it is claimed, should be fully integrated by end of Q4 2018.
The forth milestone relates to the GBX-side of the business – ICO launchpad services and the creation of the exchange itself which are expected to be in place some time from 2019. The white-paper indicates that should the ICO fall flat of its hard-cap target, they have investors on stand-by ready to pick up the slack.
Judging from the early interest being manifested in this project, that appears to be an unlikely scenario. However, given that the platform will be fully KYC/AML-compliant, its services are likely to exclude many, if not all, investors whose origin are either Chinese, South Korean, Japanese or American – a significant proportion of the crypto-investment universe between them.
With just under forty team members listed in its white-paper, this is the largest team we have come across at ICOExaminer to be listed against an ICO. The website itself lists twenty five team members, all of whom provide LinkedIn profiles – with one exception only, Adrian Hogg, the project’s Chief Financial Officer.
However, Hogg’s own credentials are assured by his previous history with Juno Services, having joined the outfit in 2005 and subsequently joining the GBX project as a result of the GSX acquisition.
The project has evident, close ties with the island’s government. That is perhaps to be expected given that prominent members of the business community in Gibraltar – population of 37,000 – are likely to rub shoulders frequently with each other and local representatives. That likely represents a further advantage for the project’s overall prospects.
There is nothing particularly revolutionary or overly technical here. 900 million tokens will be minted, of which just under thirty percent will be distributed to the team and its advisors.
The token will, naturally, be used for payment of goods and services offered by the eventual working platform. Whilst those same goods and services will likely be accessed via traditional crypto and fiat currencies also, the white-paper makes several references to advantages of token ownership – including reduced fees for trades on the exchange along with priority access to token sales managed by its launchpad services.
This advantage alone is likely to increase the token’s inherent value – provided that the platform becomes the attractive destination for blockchain start-ups hub that it is hoping to be.
ICOs coming from the outside and which are hoping to be platformed on the exchange will also be offered reductions in fees if paid in token.
Enjoying informal backing from the island’s government and itself being the result of a coming together of several dozen players from various specialist domains, this is not a team that is struggling to get its message out to the wider business community.
The team also appears to be aggressively targeting conference attendances internationally. It appears not to be pursuing social networks as a primary marketing focus. The project is also more likely to attract retail-grade investors as a result of its fully-formed legal / compliant / regulatory outline.
Some confusion may be arising in the general public mind as a result of a second project, the Globitex ICO which has co-opted the GBX abbreviation for its own marketing purposes. This is a separate project, entirely independent from its Gibralta namesake.
Put simply, the GBX proposition is about setting out Gibraltar’s stall as one of the leading go-to jurisdictions for blockchain start-ups – offering launch-pad services and exchange listings. At the same time, the real added value of the project could be that it is sets out to serve as a bridge between the world of utility tokens and that of tokenised securities, ultimately leading the former to become fully merged with the latter.
A strong team heads up the proposition, leveraging an existing business and enjoying a formal legal framework to help lead the charge – likely as a result of the project team’s own warm connections with the small island’s statutory authorities.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
Disclaimer: Please note that all ICO reviews on ICOExaminer are non-technical assessments, in some instances are sponsored, and are very often sentiment-based and should not - under any circumstances - be construed as professional investment advice.