Tone Vays Says Security Tokes Are Only Safe In Decentralized Markets, Database Risks At-Hand


The entire cryptosphere is eagerly waiting for the introduction of security tokens since the beginning of the year. Although Tone Vays is not too sure of this proposition.

Tone Vays is a Russian-American Blockchain Consultant and Researcher. He has been employed as a Financial Analyst for Bear Stearns and J.P. Morgan where he witnessed the 2008 financial crash. In 2015, Vays became the Head of Research for Brave New Coin where he helped the developer team create financial products such as the BLX Index to better identify the price of a bitcoin and any given moment.

Crypto markets are 24/7. This is the primary difference. The other main difference is you still have anonymous exchanges operating where a 13-year-old can sign up and trade. This does not happen with traditional markets. Not saying ‘good or bad’, it is just a big difference. When these things are done through a cryptographic token, it is called a ‘Security Token’.

If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract.

Vyas said:

“The tokens can be given regulatory compliance which is already very difficult if your token is being traded on anonymous exchanges. The main issue remains that there is still a technological risk on which database the token would be sitting on and how secured that database would be.”

When asked about the main difference between crypto and traditional trading, he said:

“Crypto markets are 24/7. This is the primary difference. The other main difference is you still have anonymous exchanges operating where a 13-year-old can sign up and trade. This does not happen with traditional markets. Not saying ‘good or bad’, it is just a big difference.”

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