Apple co-founder Steve Wozniak is going crypto.
On Friday, Wozniak launched his new company Efforce, a blockchain-based “energy efficiency market” for crowdfunding eco-friendly business projects. (“We created Efforce to be the first decentralized platform that allows everyone to participate and benefit financially from worldwide energy efficiency projects, and create meaningful environmental change,” Wozniak, who is cofounder but not CEO of Efforce, said in a press release.)
The launch came with the listing of a digital token, WOZX, and Efforce says investors drove the token to a $950 million market cap “in the first 13 minutes” of its listing. The company had already raised $80 million in funding from private investors before its token sale.
The token is up another 5% on Monday. And the company hasn’t done anything yet.
The stunning numbers come with a range of investor caveats.
For now, you can only buy the WOZX token on Singapore-based crypto exchange HBTC (formerly called BHEX, launched in 2018 by the former CTO of Huobi). To buy WOZX on HBTC, you must buy the stablecoin Tether (USDT-USD), then use Tether to buy WOZX. (Or you could send Tether from a U.S. exchange to your HBTC wallet.)
WOZX will also get listed soon on Bithumb, a Korea-based crypto exchange. (Unlike stocks, cryptocurrencies list on multiple exchanges, which is why different exchanges list a different all-time-high price for bitcoin, for example.) But you can’t buy and trade WOZX through a U.S. exchange site.
And Efforce, the company, is registered in Malta.
Bringing back the token sale boom?
Why would a legendary Silicon Valley engineer, who lives in California, register his new company in Malta? For the same reason so many other crypto projects (and daily fantasy sports operators) register there: The tiny island in the Mediterranean, with a population of 400,000 people, has extremely friendly financial regulations. (Bermuda has also been very welcoming to crypto projects.)
Wozniak, speaking about his plans for Efforce at the Delta Summit in Malta in 2019, said Malta “has been on my mind for decades” and is “like no other place in the world.” He also said the Maltese government is “very favorable in moving forward in the modern world,” according to the Malta Independent. (Yahoo Finance has reached out to Wozniak for further comment on Efforce.)
American financial regulators, on the other hand, have not warmed to token sales or ICOs (initial coin offering), the crypto fundraising method that exploded in 2017 and then dried up in the U.S. when it became clear that the Securities and Exchange Commission (SEC) and other regulators considered almost all token sales to be unregistered securities offerings.
The core question of the ICO boom: Were investors buying these tokens because they wanted to be customers of the companies behind them, and participate in their blockchain ecosystem? Or were they buying them as a speculative investment on the promise the tokens would go up in value?
William Hinman, the SEC’s director of corporation finance, made the agency’s view clear at Yahoo Finance’s All Markets Summit in 2018 when he suggested that bitcoin (BTC) and ether (ETH) are not securities, but most ICOs are securities offerings, and that, “calling the transaction an initial coin offering, or ‘ICO,’ or a sale of a ‘token,’ will not take it out of the purview of the U.S. securities laws.”
Capital raising through blockchain requires compliance with federal securities laws https://t.co/IjOxjoVdfK
— SEC Enforcement (@SEC_Enforcement) July 25, 2017
That year, the SEC took a number of enforcement actions and levied fines against companies that listed tokens without SEC registration. Amid the ICO boom, virtually none of the ICOs that made instant millions registered with the SEC, and in many cases, regular investors lost their shirts.
Meanwhile, bitcoin hit a new all-time-high on Nov. 30, driven by institutional investors and public embrace of bitcoin by PayPal and Square. Bitcoin’s surge has helped boost prices of other altcoins.
This is the backdrop against which Wozniak has launched a digital token. It’s a risky investment, and one that, for now, you can’t make through a U.S. exchange site—but Wozniak’s imprimatur may make casual investors (and Woz admirers) feel safe.
—
Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers bitcoin and blockchain. Follow him on Twitter at @readDanwrite.
Read more:
Why this bitcoin run is different: Grayscale managing director
Bitcoin hits new all time high, driven by institutional buying
Bitcoin is surging in 2020 and nearing its all time high — here's why
Why bitcoin and altcoins are hot again this summer
Square's bitcoin bet is paying off
Jamie Dimon says bitcoin is 'not my cup of tea' even as JPMorgan has warmed to crypto