Category: ICOs

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MFSA published a Circular to the VFA Issuers

Categories Financial Services, ICOs, Legal Notice, Regulation, Financial Institutions, MFSA, VFA

MFSA published a Circular to the VFA Issuers

On the 15th of January 2019, the MFSA (Malta Financial Services Authority) published a Circular addressed to VFA (Virtual Financial Assets) Issuers that are either availing themselves of the transitory period under Article 62(1)(a) of the VFA Act or that fall within the scope of the exemption under Regulation 3 of the VFA Regulations but will continue their offering after the 31st January 2019. Such VFA Issuers are to submit a compliant Whitepaper with the MFSA by no later than the 31st of January 2019.

The Circular aims to clarify the process of registering the Whitepaper through the online Registration Form for Whitepapers under the Act, which is to be filled in by the Issuer’s VFA Agent.   The Circular also announced the publication of the final version of the Financial Instrument Test as well as an updated version of the Glossary of Terms, with specific emphasis to the definition of the terms ‘offer to virtual financial assets to the public’, ‘admission to trading on a DLT exchange’ and ‘Systems Auditor’ especially in relevance to the Whitepaper Registration Form.

Publication of an updated Guidance Note to the Financial Instrument Test is expected in the coming days.

If you would like further details about our services please contact us by sending an email to [email protected] or call us on +356 2010 3020

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‘It’s the season to be Jolly’ Happy Holiday from the E&S Team 

Categories iGaming, ICOs, Malta, E&S Group, Conference

‘It’s the season to be Jolly’ Happy Holiday from the E&S Team

The Festive season is here once again and 2018 has been a great year for E&S Group. We started off by offering tailor-made ICO services to foreign and Maltese companies wishing to operate their ICO in Malta, amongst other exciting activities.

In March 2018, the Maltese Government took a positive stance assuring that they will be the first jurisdiction to properly regulate this space. In fact, this has placed Malta on the map having progressive laws regulating this industry. In October and November, the Maltese Parliament enacted three laws securing Malta as the most progressive jurisdiction in the world to offer clear regulation in this space. These laws are the Malta Digital Innovation Authority Act (MDIA), the Virtual Financial Assets Act (VFA), and the Innovation Technology Arrangements and Services Act (ITAS).

In this ever-growing industry, Malta became the go-to country for big corporations working on the blockchain and crypto sector. In fact, Malta attracted several companies, most of which work on crypto exchanges on the blockchain platform, securing Malta its title of ‘Blockchain Island’.

In the past year, E&S Group has successfully advised over 90 ICOs and STOs throughout their concept stage, all the way up to actual offering. As this substantial demand of companies working on the blockchain grew, this resulted the company to grow too, and today employs 45 staff members of various nationalities. By doing so, we are able to ensure that the company will continue to offer a premium service to all of our clients.

2018 in Conferences

Our company participated in numerous events related to the blockchain and iGaming sector throughout the year. Key events that attracted foreign entrepreneurs from all over the world included the Delta Summit which took place in October and the Malta Blockchain Summit which was held in St Julian’s and took place in November. For the latter, E&S Group organised a stand serving cocktails to clients, as well as a photo booth which attracted prospective clients to find out more about what we offer. The company also organised an after-party to thank our clients participating in this industry. The end of November also saw the largest iGaming event in Malta, which took place at the MFCC Ta’ Qali. This event welcomed many iGaming companies willing to delve into the blockchain sector and presented the opportunity to speak to one of our representatives and find out more about what is required to be a part of this industry. We also participated in foreign conferences such as the Futurama Conference in September in Ibiza, the European Blockchain Convention in November in Barcelona, The Blockchain Leadership Summit in Switzerland in November and the World Ethical Data Forum in Barcelona, Spain last September.

E&S Group is continuously growing and delving into new sectors of the market, most of which include iGaming, ICOs, STOs and crypto exchange companies. 2018 was a great year, and we are expecting 2019 to be better. We are set to keep providing an excellent service and ‘make things happen’ to all of our loyal clients.

During this festive season, our offices will be closed from Friday 21st December till the 1st of January 2019. We will reopen again on January 2nd 2019. We would also like to take this opportunity to wish you all very happy holidays and a prosperous New Year!

 

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Jurisdictions with a different legal outlook towards Coin Offerings

Categories Blockchain, Cryptocurrency, ICOs, Malta, Law, DLT Regulation, Regulation

Jurisdictions with a different legal outlook towards Coin Offerings

The year 2018 was marked with technology advancements and new trends. The DLT industry started to get widely recognised in many jurisdictions around the world, making way to a new digital economy. Most financial service providers are using technology to their advantage, utilising blockchain wisely to store in data, or creating complex mathematical algorithms to create an easy way to digitally facilitate, verify, or enforce agreements by means of smart contracts. Moreover, the FinTech industry is also growing substantially, with many financial institutions opting to become part of this industry.

Countries implementing different ICO Laws

This year has marked a record-high for new ICO ventures launching their crowdfunding platforms. Many companies are now opting to design tokens to be exchanged for services offered to their clients. Various countries have taken different regulatory approaches towards this growing industry, with some regulating the space and others opting for non-regulation. Certain countries decided to implement strict legislation by banning people from owning cryptocurrencies or investing in ICOs altogether, while others have built well-structured progressive legal frameworks that provide legal certainty.

Stringent laws taken by the SEC in the US towards ICOs

Meanwhile in the US, ICOs are not formally regulated across the country, however, various administrative agencies, such as the Commodities Futures Trading Commission (CFTC), the Financial Crimes Task Force (FinCen), the Department of Justice (DOJ) and the Securities Exchange Commission (SEC) have taken measures to regulate this market. The most notable administrative agency overseeing ICOs is the SEC. The SEC’s purpose is to investigate and regulate all securities issued by companies, while “protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.

Although no concrete legislation regarding ICOs is in place, the SEC has jurisdiction over any securities related matter from the power granted to it by the Securities Act of 1933 and 1934. Guidance is also given regarding to what constitutes a security by the 1946 Supreme Court Case commonly known as Howey. Howey set forth a test used to determine whether an asset being offered constitutes the sale of a security. This test is applicable to all ICO issuances implicating the United States. The Howey Test is a financial instrument test which states that, if the asset meets all the elements, then it will be treated as a security. The elements of the test are as follows: 1) an investment in a common enterprise, 2) with the expectation of profits, 3) primarily derived from the entrepreneurial efforts of others.

Companies in the US launching their ICO have been commonly identifying their tokens as utility tokens in hope of circumventing registration with the SEC. However, utility tokens are not a legally recognised concept in the US and instead, the SEC looks at the economic realities of the transaction.

Although the US has stringent ICO Laws, companies are still risking to set up and open their ICO venture, due to the United States entities receiving the highest amount of crowdfunding.

In the past year, a number of celebrities and other public figures have endorsed ICOs, encouraging their fans to invest their money. However, recently, the SEC issued a warning to investors in various tokens stating that they are subject to have violated anti-touting laws along with anti-fraud provisions. In this case however, the SEC failed to clarify how these endorsements were paid, either directly or by indirect payment. Moreover, the SEC stated that celebrities marketing such ICOs “…may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement. The SEC’s Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true.  We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”  Hence, these promoters might be held liable on the basis of ‘acting as unregistered brokers’ as well as taking part in transactions of securities which have not yet registered by the SEC.

What about the Asian market?

Asian countries have taken various stances with regards to ICOs; some have imposed strict laws banning ICOs altogether, while others take a lenient and progressive approach towards ICO tokens and treat them on a case by case basis. For example, the Monitory Authority of Singapore (MAS) does not regulate the issuance of utility or payment tokens, but only security tokens. With this positive approach many ICOs – who typically issue utility tokens -have launched their ICO in Singapore, making it one of the most popular jurisdictions in Asia.

On the other hand, the People’s Republic of China (PRC) took a firm stance against all ICOs, banning citizens from launching them altogether. In addition, any coin offering including exchanges used to trade virtual coins have also been banned. This approach was set in motion when China stated that all ICOs are bound to hurt the market since they are prone to deception and fraud. For this reason, the PRC is encouraging ICOs issuing their currency to follow laws which protect investors rights while trading on a platform.

European Diversity

In Europe, many countries have enacted favourable ICO Laws, attracting Asian companies to shift their operations to Europe, which in turn resulted in a healthy growth for the sector. Three proactive and progressive jurisdictions in Europe that have received praise from many fronts are Estonia, Switzerland and Malta. Many large crypto-exchanges set up shop on the territory of these three countries, especially in Malta.

Estonia with its already set and business-friendly laws is attracting many ICOs and crypto companies to register their operations on its territory.

In the “crypto-valley” of Switzerland and the technological city of Zug, there are many ICOs operating. The Swiss Financial Market Supervisory Authority (FINMA), has implemented forward-looking ICO Laws, and many investors and issuers see Switzerland as a “go to” country due to its favourable taxation laws.

Meanwhile the Maltese Parliament has provided a firm progressive stance with regards to Blockchain, ICOs and crypto exchanges. This has motivated many big companies such as OKEx and Binance to move their operations to the island. On the 1st of November, three regulating acts came into force, which will enable more businesses working in this industry to benefit from these innovative laws. The Malta Financial Services Authority (MFSA), will be the primary institution regulating this sector. Moreover, Malta’s tax rate to foreign companies is that of 35%, but by implementing effective tax planning it can go down to as low as 5%.

Malta is gaining a lot of traction within the tech industry, with many companies opting to set up shop on the Island. Malta will continue to strive and compete with other countries who are looking to follow the “Blockchain island” regulating framework of this industry.

Many legal companies sought out the opportunity to delve into this industry. One of the companies to stand out in the industry is surely E&S Group, a legal and corporate firm based in Malta, offering tailor made services to ICOs, crypto exchanges and Tokenomics to clients. So far E&S Group has successfully advised over 90 ICOs. E&S Group is being sought after by several ICOs wishing to launch their ICO project in Malta. Apart from that, said ICOs would also need to incorporate their company in Malta before getting started with their crowdfunding their project.

If you would like to know more about what we offer, send us an email on [email protected]. Our professional team of lawyers and accountants are there to make sure that your ICO will happen.

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European Blockchain Convention to be hosted in Spain

Categories Blockchain, Cryptocurrency, ICOs, Malta, E&S Group, Technology

European Blockchain Convention to be hosted in Spain

Blockchain technology has formed a trend among many companies, many of which Fintech and ICOs aspiring to implement such innovative technology within their respective economic sectors. Many jurisdictions, however, have a different take to this disruptive technology – some are interested in regulating it such as Malta for instance, whilst others, such as China, are banning it.

In 2018, Malta has become a trailblazer to this new industry, passing 3 crypto-friendly bills which came to force in November. The aim the Maltese government was to keep this space competitive, regulated and thriving, attracting many foreign companies to set up shop within the widely dubbed “Blockchain Island”. Financial institutions established in Malta are providing legal advice and corporate services to prospective ICOs and STOs willing to conduct their crowdfunding campaigns from Malta. E&S Group is one of the most advanced legal and corporate firm to provide these tailor-made services to its clients, and the first legal company to tokenize its services back in March.

In a study obtained by ICO Bazaar, it has been concluded that in 2018 alone, the average crowdfunding reached was that of $200,000 – $1,250,000, this total sum includes preparation costs, together with the one-month token sale. Over this period, E&S Group has advised over 90 ICOs.

The topics of the digital economy, growth, and the emerging number of ICO conducted within different legislations will be discussed during the European Blockchain Convention held in Barcelona, Spain, on the 29th November. The theme of this year’s conference is “Building the foundation of Blockchain and the Digital Economy”.

Karl Shranz, co-founder of Malta’s leading ICO and Crypto Advisory firm, E&S Group, will be participating in a panel discussion titled: “Overcoming Barriers to Institutional Acceptance of Digital Assets.” Karl will share his expertise on the Maltese legal framework experience and future prospectives. Besides Karl, the panel consists of two other people contributing to the discussion, namely Stephanie Ramezan, Co-Founder of Quince Capital, and Eneko Knorr, Founder of Pheiden Capital moderated by Pernille Enggaard, Finance and Business Journalist at Radio24syv.

The conference will host 50 speakers and is expected to host over 500 industry leaders, regulators, politicians, investors, developers, CTOs, lawyers and entrepreneurs building the foundation of the Blockchain and the Digital Economy who will attend this convention.

This convention will also discuss various topics in relation to regulations, economic impacts caused by Blockchain and the industries’ changes under the influence if this phenomenon. If you would like to know more about this convention, or would like to set a meeting in Barcelona, kindly contact E&S Group on  [email protected].

 

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Manhattan property worth $30 million, tokenised with blockchain

Categories ICOs, E&S Group, Tokenomics, Ethereum, Real Estate, Property

Manhattan property worth $30 million, tokenised with blockchain

A new condo development in the heart of Manhattan is set to become the first to be tokenised via the Ethereum blockchain. The unit consists of 12 units, each at 1700sq ft, located in 436 & 442 13th St in the East Village, one of the most sought-after areas in the city.

Listed by Ryan Serhant, a celebrity real estate agent, he and the developer decided to turn to tokenisation as a new way of financing the project. This could pave the way for other projects to follow suit as well as offering a better alternative for both the project and the investors.

“The market in New York is always strong, but it can take some time to sell for the right price in a new construction building. With blockchain tokenization, we can remove the unruly pressure of traditional bank financing, which is much healthier for the project and all of the stakeholders. Tokenization is paving the way for a new forefront in real estate development,” Serhant said.

Tokenisation is a way of representing ownership of a product or asset in a digital way on the blockchain. This new way of financing is the result of a collaboration between Fluidity and Propellr, two businesses that have come together to offer fully compliant services that enable the creation, distribution, and transfer of digital securities.

Todd Lippiatt, CEO of Propellr stated;

“Traditional securities structures and issuance frameworks haven’t evolved in a long time. With blockchain technology, a transparent and trustless ecosystem can start to solve the information asymmetry that hinders the market’s potential for liquidity. This asset, structure, sponsor, and sales team showcase this evolution. With proper discipline and respect, the future is bright for tokenized securities.”

Propellr is a management, creation, and servicing platform for digitally held assets and it is also the parent company of a FINRA registered broker/dealer called Propellr Securities. Their aim is to use their financial and capital market experience to both offers and sell tokenised securities under the Reg D Rue 506 (C).

Fluidity is the company behind AirSwap which offers technology services to broker/dealers, financial institutions, and issuers for tokenised securities. The partnership between Fluidity and Propellr means that they can now accept fiat payments as well as both solicit and sell securities in line with the law.

Investors in the project are able to choose between receiving analogue or digital assets in the securities which means that all kinds of investor are covered. AirSwap technology will also be utilised the process, as well as tokenising securities and helping a fully compliant secondary market to emerge.

“Along with our flagship AirSwap, we’re building a system that brings local assets online using blockchain technology. This makes them available for trade on a global marketplace—directly among buyers and sellers. Fluidity is forming the foundation of a new system of tokenization and trade,” Don Mosites, co-founder of Fluidity, stated.

E&S Group recently became the first business of its type to tokenise its services– this is also something we can help you do. Whether you want to tokenise your products and offerings or tokenise an asset such as property, our team of experts can guide you through the process, so get in touch by sending us an email at [email protected]

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Crypto-friendly banks expected to open in Malta in the next 12 months

Categories Blockchain, Cryptocurrency, ICOs, Bank, DLT Regulation, E&S Group, Cryptocurrency Exchange, Tokens, Wallet, Delta Summit

Crypto-friendly banks expected to open in Malta in the next 12 months

Roderick Psaila, a Malta-based banking expert spoke about the future of crypto-banking at the Delta summit in Malta held between the 3rd and 5th of October. The three-day event was the world’s first official and government approved blockchain event of its type, and it attracted over 1500 delegates from all over the world.

Speaking as a part of a discussion panel, he was responding to criticism of traditional banks hesitancy to embrace blockchain, DLT, and cryptocurrencies despite the fact that the Maltese government has approved the DLT legislation in November.

“We are already seeing new, smaller banks show a willingness to adopt blockchain technology, but legacy banks will take longer to come round, because of their systems in place and because they tend to expect higher standards,” he said.

He also stated that he believes that two to three crypto friendly banks will open in Malta within the next year that will be amenable to blockchain and crypto, as well as being conducive to the industry’s growth.

This could be due to the fact that it is unlikely for the banking industry to fully adopt and embrace blockchain technology until matters around its compliance with anti-money laundering framework were finalised. Until this framework has been deemed acceptable to banks, it doesn’t matter how acceptable it is to operators, ultimately the banks have the final say.

Also on the panel was Michael Matthias who is the CEO of digital currency Dascoin and he stated the need for banks to catch up with modern technology instead of shying away from it.

“And yet, as blockchain technology becomes more mainstream, it is not farfetched to imagine a near future in which cryptocurrency is used as the coin of choice in everyday payments and transactions,” he said.

The Delta Summit, the first of its kind has been called a resounding success by all that attended. Dr Christian Ellul, Director of E&S Group also spoke on a panel discussing Malta’s bright future as the “blockchain island”. Other speakers at the event included the Prime Minister of Malta Joseph Muscat, Changpeng Zhao the CEO and Founder of Binance, and other global stakeholders in the blockchain, crypto, DLT, and ICO sectors. If you have any questions in relation to ICOs, and Malta’s legislation regarding ICOs and blockchain please contact us on [email protected]

 

 

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Lithuania is looking to regulate Token Generating Events

Categories ICOs, Law, Technology, Trading, Cryptocurrency Exchange, Bitcoin, Regulation

Lithuania is looking to regulate Token Generating Events

Last October Lithuanian authorities were invited to attend a seminar that was seeking to examine the threats and potential benefits of the ICO sector, particularly with regards to the country’s economy. Whilst reports from BitMEX last week found that ICOs had so far managed to break even in terms of profit and loss in 2018, trends have shown a bit of a slump in the popularity of the market. Alongside the falling value of Ether and Bitcoin, it seems that fewer ICO projects were launched in 2018 when compared to the first half of the year.

All things considered, it does seem that it is good news and a positive sign that the market managed to break even, despite poor conditions.

Fraught with bad press

This does not mean that ICOs are not without their lack of other issues. Their issuance is fraught with lack of regulation and bad press, and research conducted at the beginning of the year found that almost 80% of ICO projects that were launched in 2017 could be classified as “scams”.

As a result, Lithuanian authorities have come together to voice their concerns over the ICO market, something that is becoming commonplace in a number of jurisdictions. Politicians in the country, as well as a representative from the central bank, came to the conclusion that cryptocurrency and digital assets have created a substantial market in the country that yields a huge turnover.

“Virtual currency has huge cash flows, but (there are) worries about converting them into dollars and euros as quickly as possible, (and) leaving virtual currencies as quickly as possible.”

Creation of a regulatory body

Whilst there is a concern over the cryptocurrency cash flow and the lawless style of the ICO market, Lithuania has vowed to create its own regulatory body that will oversee the developing industry. The newly created body will be responsible for supervision and enforcement, but it will also be on the lookout for possible benefits that could emerge from blockchain and crypto.

This development will see the country follow in the footsteps of Malta which introduced its own blockchain, cryptocurrency and ICO legislation on the 1st of November 2018. To find out more about launching an ICO in Malta, please contact E&S Group by sending us an email on [email protected].

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Digital money: Argentina’s solution to its economic crisis

Categories Cryptocurrency, ICOs, Bank, Technology

Digital money: Argentina’s solution to its economic crisis

As the leading cryptocurrency in the market, Bitcoin is the solution Argentinian investors are considering during the current economic crisis.

Economist and mathematician, D.H.Taylor stated:

“Argentinians are moving in large numbers out of their peso and into a more stable currency, BTC. The numbers being witnessed by the markets in BTC are surging from Argentina.” He adds that “The stability being offered by the digital currency is far greater than the peso and Argentinians are moving in quickly.” Additionally, Taylor used a chart of weekly volume BTC purchased in Argentina as an undeniable evidence.

Argentina has been undergoing an economic crisis since April 2018, when the peso was dropping in value against the dollar. However, Argentina still remains one of the wealthiest countries in Latin America.

The sudden drop of the peso according to most economists is due to the relationship between investors and the government. Investors are suspicious of the government’s ability to contain unrelenting inflation, and to minimise the effects of the U.S. Federal Reserve interest rate. Whilst this led to a drop in the value of the peso, it actually strengthened the value of the dollar.

Nowadays, it seems the Argentinian Central Bank is looking for solutions such as diversifying into digital currency. Athena Bitcoin installed the first crypto ATM on September 19th 2018, so that people can exchange cryptocurrency in a public space.

Matias Goldenhorn, the Athena Bitcoin Director for Latin America made the case so much clearer by stating that this system, expected to spread soon in Buenos Aires, will operate with BTC, Litecoin, Ethereum and BTC Cash. Taylor states that currently, there are nearly 8,000 Bitcoin pay stations in Argentina.

If you are interested to open up an ICO in Europe’s stable economy, Malta, E&S Group is the right company to help you achieve your goal. In 2018 alone, E&S Group has successfully advised over 90+ ICOs. For further enquiries send us an email on [email protected]

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Visa announces a collaboration with big names for its tokenisation service

Categories Blockchain, Cryptocurrency, ICOs, Payments, FIAT, Visa

Visa announces a collaboration with big names for its tokenisation service

Visa Inc, one of the world’s largest payment providers has recently announced the expansion of its newly created Visa Token Service for its credential-on-file (COF) token requestors. The official announcement was made ob the 18th of October. This news marks a major milestone towards the further securing of consumer payments over a digital channel.

As a part of this new project announcement, acquirer gateway and tech partners such as Adyen, AsiaPay, Braintree, Checkout.com, Cherri Tech, CyberSource, Elavon, Exidebit, eWay, Fit-Pay, Giesecke & Devrient, PayPal, Payscout, Rambus, SafeCharge, SecureCo, Square, Stripe, WorldPay, and YellowPepper are already, or will soon be able to tokenise credential-on-file digital payments on behalf of merchant and payment clients.

Working with the EMVCo Payment Tokenisation Standard, the Visa Token Service offers customers additional security by removing the need to use personal account numbers and expiration dates and introducing a unique digital identifier (token) instead. This token can then be used for payment without the need to expose the cardholders personal or sensitive information. In addition to greatly improving security, any expired or leaked credentials can be easily introduced into the background by the financial institution in question.

Merchants can also enjoy extra protection from data breaches that can occur elsewhere in the ecosystem because the Visa card number can be replaced by a token that is unique to the gateway partner, or merchant.

Ansar Ansari, SVP of Digital Payment Products at Visa said:

“Today, we welcome 20 partners into the Visa Token Service who will help scale tokenization to their thousands of merchant clients and millions of customers around the world. This opens up a world of possibilities for our merchants and partners to further evolve and innovate in digital payments. Making digital transactions even more secure is one of Visa’s biggest priorities. Working with Visa, these partners will help secure cardholder data and make digital payments safer, resulting in friction-less digital commerce experiences for consumers.”

“Adyen is excited to be the first acquirer in the payments ecosystem with in-market solutions to support and offer Visa Token Service to our global merchants,” said Kamran Zaki, president, North America, Adyen. “In addition to improving security, Visa network tokens through Adyen will allow our merchants with cards on file to reduce involuntary churn and improve authorization rates without any additional work on their part.”

A spokesperson from Worldplay, Asif Ramji said;

“Worldpay is committed to protecting the integrity of every transaction and this solution integrates well with our own security and tokenization products. By forming strong relationships with companies like Visa to bring global scale to every merchant, we ensure their ability to deliver positive customer experiences. Importantly, Worldpay merchant partners who take advantage of our implementation of the Visa Token Service do not need to wait for individual certification and approval to begin protecting their customers’ data.”

If you have any questions in relation to ICOs, tokenomics and Malta’s legislation regarding ICOs and blockchain please contact us on [email protected]

 

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The Pharma Counterfeit Problem on a Global Scale

Categories Blockchain, Cryptocurrency, Regulatory, ICOs, Malta, Law, E&S Group, Conference, Blockchain Leadership Summit

The Pharma Counterfeit Problem on a Global Scale

The investments into blockchain technology in the healthcare industry are growing rapidly, reaching $200M according to a recent report of the major consortium R3. The implementation of the DLT technology in the healthcare industry is caused by the emerging problem of pharma counterfeit and ineffective supply chains.

Anything that makes money will be counterfeited. This affects patented medications as well as generics. Expensive, prescription drugs, such as those used in AIDS or cancer therapy, are especially lucrative for dubious businesses. Antibiotics are the most commonly counterfeited drugs, particularly in low-income nations where medicines are prohibitively expensive for many people. In high-income countries, there is a growing trend toward fake “lifestyle” medications.

Illegal trade takes place around the world. The World Health Organization (WHO) estimates that counterfeit medicines worth 73 billion euros are traded annually. Dubious online pharmacies that conceal their true location deliver globally – reaching countries such as Germany, UK, Italy, Spain etc. or the USA. Supplies from illegal internet pharmacies – those without appropriate certification – are up to 50% counterfeits.

The extent of the problem varies greatly between regions and individual countries, and also depends largely on temporary supplies. The problem is highly dependent on how tight legal controls are. The WHO estimates that in some areas in Africa, Asia, and South America, more than 30% of medicines in circulation are fake. In some countries in Eastern Europe, the proportion of fake medicines can be more than 20%.

The current state of healthcare and pharma records is incoherent and irrational due to a lack of common architectures and standards that would allow the safe transfer of sensitive information among stakeholders in the system. Blockchain application in the healthcare industry, while still at the early stage of development, it presents various opportunities such as:- keeping track of patients’ health, new insights on population health; and supports the direction toward value-based care.

There are already several use-cases in the pharma industry: blockchain can help with verifying the authenticity of returned drugs and compliance in the pharma supply chain. Merck in partnership with SAP has developed the SAP Pharma Blockchain POC app for the use-case. Blockchain protocols in clinical trials can provide transparency and traceability of consent.

Another groundbreaking use-case in pharma is the prevention of counterfeit drugs and medical devices. One of the largest pharmaceutical companies in the world based in Basel, Switzerland, Novartis AG, has made a tremendous progress in this direction. They have been experimenting with blockchain since 2016 and have run various proofs of concept (PoCs). Today, their primary tech development is aimed to identify counterfeit medicines and track temperature with real-time visibility for all participants in the supply chain, using Blockchain and IoT.

They are also working on a public-private partnership between the European pharmaceutical industry and the EU – the IMI Blockchain Enabled Healthcare program. The program aims to partner the pharma industry with a consortia made up of SME blockchain companies, universities, clinical labs, hospitals, patient representatives and others. It’s a wide-ranging project that includes counterfeit drug detection, supply chain, patient data, and clinical trials.

The potential of the blockchain implementation in the healthcare industry will be discussed on Blockchain Leadership Summit in Basel. If you would like to attend one of the most significant events of the year with us, E&S Group will be happy to give you an exclusive 50% discount for any ticket. All you have to do is to use the promo code: BLS2018_exclusiveE&SGROUP. If you would like to get further information on this event please send us an email on [email protected].

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