Bitbond announced that it has received regulatory approval from BaFin to issue security token offering (STO).
The German regulator approved Bitbond’s plea under the German Banking Act for its blockchain-based lending business. The peer-to-peer lender has become the first such blockchain-based financial services to be supervised by BaFin.
Commenting on the development, Bitbond founder and CEO Radoslav Albrecht told CryptoNinja: “We are the first regulated blockchain company to set new standards. It is important for us to show investors who trust our platform that we act according to transparent rules.”
Launched in 2013, the Berlin-based company lends capital to small businesses via its peer-to-peer network. Its primary targets are e-commerce type businesses operating on Amazon and eBay. The firm claims that it hosts more than 50,000 investors and funded over 3,200 loans worth more than $15 million. The maximum loan a party can avail on the platform is worth £22,000 (€25,000).
According to Bitbond’s prediction, the lender will touch €1 billion in annual lending volume by 2022.
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Security Token Offering
The blockchain-based lending platform is using Stellar’s blockchain to issue the security tokens.
As per the prospectus of the offering, “token holders will receive 1% interest on their invested amount every quarter (4% per year). Additionally, token holders receive a variable coupon paid out once per year. Both the quarterly and the annual coupons continue for 10 years, at which point the token reaches its maturity and is bought back at its face value of €1 per token.”
Albrecht has high hopes for the upcoming token offering of the firm. In a recent interview with local new platform Handelsblatt, he said that the minimum raise for the company is between €3 to €5 million, but the STO can boost the figures up to €100 million.
According to reports, BaFin has three more STOs approvals pending in its pipeline.
The German company is also determined for global expansion as last December; it partnered with payment provider Stripe to increase support to e-commerce businesses.