Interview with Ryan Morrison, CEO BlackFox


STO (Security Token Offering) is a new buzzword in Fintech Space over ICO(Initial Coin Offering). Here we demystify the clutter around STO with our interview with Mr Ryan Morrison, a Netherlands based STO Expert and CEO of BlackFox, a community driven Security Token Network.

[01.36] Ganesh: Greetings Mr.Ryan, This is Ganesh From Wimplo, I’m A Senior Journalist. Can you introduce yourself and what inspired you to choose this risk fused-industry? Also, what made you start with STO?

[01.50] Ryan: Hi Nice to be talking to you over the Security tokens, for the ones don’t know my name, is Ryan Morrison and I’m the founder of Black Fox Network. We are a community for the security token industry, where we gather different clients from the investment side and also from businesses that are trying to learn about security tokens and service providers.

[02.45] Ganesh: Is it compulsory to become a member with BlackFox? If not, what are the advantages of becoming a registered member over non-members?

[03.00] Ryan: No it’s not mandatory to be a member, we have a lot of free members of the community and some premium members and the main difference is that premium members get to see more information.

For ex: we do interviews with founders of the projects and we put the full interviews mainly for our premium members; Also we organize special events and roundtables mainly for premium members but for everyone we do once a month a meet up about the security tokens. We did it now in the Netherlands. So you don’t have to be a member of the network to be part of.

[04.11] Ganesh: So what does it take to be a member of BlackFox?

[04.16] Ryan: I have been involved in crypto for a few years now and I have a marketing background. So I started doing interviews for myself mainly as a crypto investor, wanted to know when I could get involved in an ICO, I wanted to know the team behind is a real team and not a scam.

So then I did my own due diligence and the last part of the research was contacting the team, I did meet-ups like the one we are having now, and I record the sessions and then put them online for everybody to see. To be useful for other people who are investing in ICO’s.

From there I built a community called ‘Blockchain markets’ mainly around utility tokens and talk about different projects that today is Black Fox network, which is much more on the security tokens.

back to your question — We have a model for everybody in the community discussing online and offline about the regulations of different countries. Businesses that are planning to run the security tokens offering to learn about a different way to raise the capital.

[06.30] Ganesh: What are the USPs of BlackFox STO that prompt you to claim your platform as ‘One of the most thriving STO community’?

[06.44] Ryan: Initially, we thought that this industry is really in the early days. Comparing to ICO’s we saw that ICO’s have raised 15 to 20 billion USD and comparing to STO market which is more compliance side of things and less than 1 billion. In order to grow this community we need to get together with all the members of the industry.

We started to partner up with a lot of service providers and issuing platforms, lawyer firms, accountant firms and businesses that want to learn how to do it  for themselves. We haven’t seen another community as specific and as close we are that are doing actual events on the security tokens.

So we don’t just do online but also a lot of things like meetups, that’s something unique in the security tokens. We haven’t seen any STO meetups at least in the Netherlands or northern Europe. There was one meetup in London by a company; but not a community driven approach.

[08.50] Ganesh: You are also educating the community for the people to have better awareness about STO, so they make an uniform choice when they go for STO..right..?

[09.00] Ryan: We want to educate them and when they have questions we can help them or if we cannot, we connect them with another member of  the community. We had questions on our website or company, which for example is based in Germany, then they know the German Law, but don’t know the development process. And they ask us Do you know what are the procedures to do it in Switzerland or in Malta.?

Because of our network we know the steps and what it takes to get that. We can connect local partners in each of those countries. If the company wants to do an STO in Malta, we can connect them to a lawyer firm i.e one of our members which is included in our membership.

[11.14] Ganesh: You do the background check before connecting with your members to your clients?

Ryan: I think it is the Unique Selling Point of our community-driven approach, that we do basically what they would do if they would had more time.

[11.34] Ganesh: What’s effective asset tokenization and how that would minimize loss for an investor?

[12.01] Ryan: It’s difficult to say because it depends very much on the project but if we talk about maybe the risk about the illiquidity in the normal market. Now let’s say you are a venture capital firm and your job is to invest in startups, then you have a period of 8-10 years where it is completely illiquid till then you cannot sell, after 10 years you expect to either sell in an IPO or a new round.

So between those 10 years, a lot could happen, may be the company you invested survived 6 out of the 10 years. So with the asset tokenizing, you could actually exit early.

Once it is tokenized, the shares of the company will be in an exchange. You as an investor can decide to either wait for 10 years or longer or decide to sell it today. Because you never know what could happen to the startups you’ve invested in.

[13.52] Ganesh: Can you describe who your ideal investors are? What are the opportunities, limitations and even the regulations that should be considered before investing?

[14.05] Ryan: What we’ve seen is that the ideal investors for the projects that run on STO are companies that know about the crypto space.

You have more crypto or the venture capitals that either invest in crypto projects and also looking to invest in security tokens, if I would be them, those are the investors I would be approaching first, because they understand the benefits of the blockchain.

[15.07]Ganesh: Can you explain how your elite members have benefitted and Would you like to share few acknowledgements in their own language or in their own words?

[15.33] Ryan: We’re doing everything in English. The idea in the beginning was to go for local languages, specially in Europe. A lot of countries in Europe do understand English so, that is mainly our focus and for the moment we’re just doing everything in English.

In the future we’ll start to localize that would make sense, but for now because the industry is small, it makes sense to start a with a generic approach in English.

[17.00] Ganesh: Would you mind sharing some of the acknowledgements of your elite members?

[17.13] Ryan: We do have some interesting members in the community like the banks as they are trying to also get into it through the tokens and trying to understand how this technology is going to impact their business model.

Banks are showing interests by attending meetups, it shows it is actually going to happen; but also we’ll also see some excitement from businesses that want to learn, as it is difficult to raise capital and is also time consuming.

[19.14] A company in the Netherlands is running out a security token offering and they do computers and they grew because of a campaign they did in Indiegogo and Kickstarter; one of those, so they can also raise more capital now going to the same user base; instead of going to a more normal way and raising through the venture capitals.

[19:51] Ganesh: Can you explain what’s ahead in 2019 as far as STOs are concerned? How certain are you about that?

[20.14] Ryan: I think there are two things; if we compare them to the ICO market and the second one through venture capital firms and private equity.

ICOs are great because it allows anybody to raise capital and because it was easy and it didn’t have any compliance in between like they were not asking for KYC or AML. So then some scams happened. Some people also took the money and left, and that left smaller investors a bit afraid.

The main difference with STOs, because it has compliance, you have to know if you are raising capital; you have to know who your investors are and where they are located; the names. You need to do the KYC and the AML.

You have to know who is investing in you and you can give that authorities if they want to audit. On the other hand, if you are an investor and buy shares of a company, in this case, that are tokenize then you know that’s a real asset there. Some of them of course great, but in this case you get more certainty as an investor that you are investing in a piece of a company is a share. Risk is also a bit lower.

Ganesh: How STOs can replace the mainstream method of fundraising?

[22.41] Ryan: Compared to the capital markets now, it’s super super small and vast majority of the investors; normal investors and institutional investors can get into security tokens in the next couple of years. By seeing the community do a lot of research about it and what we’ve seen is that fans are the ones that are investing in this, as they understand the technology and see the potential. Once you start seeing the first changes in line; I think then the bigger investors will come out.

[24.00] Ganesh: STOs appear to be relatively new in this space and so there seems to be no long term testing of the offering as yet, which may increase the risk for both investor and business. Is this a valid concern? How do you deal with this perception?

[24.22] Ryan: The fact they are really new, there was a platform that raised something around three hundred million. They say see this as something interesting, but they don’t want to try and then fail. Smaller companies are trying this and when it works then other platforms run crowdfunding websites or investors that invest in stocks and bonds will consider tokenizing assets. But at the moment it is something very risky.

[25.36] Ganesh: So were you able to successfully raise funds of the companies or through you events of STO.?

[25.45] Ryan: We don’t raise capitals for ourselves, in our community we have campaigns that want to raise the capital, they contact us and we give them right lawyers, accountants in their local. Also there are limitations, like if a company is based in Germany or in Sweden or Netherlands, you have to comply with the locals laws.

Germany and Netherlands is the same thing; you got to raise five million euros without having to give perspectives to the local financial authorities. In the cases of other countries  Liechtenstein like Malta, Gibraltar, you could raise fifty million in the future. Businesses can be seen moving there taking advantage of the local regulation; setting up a foundation and raise a capital.

[28.28] Was just listening to the podcast with the CEO of one of the exchange platforms, forecasting that this year STO will grow to something around 10x. Also the platform has been involved in biggest tokenization of funds.

We’re raising capital with security tokens and seeing funds from Germany. Another exchange from US is Open Finance, probably we’ll also see more from Europe and Singapore from Asia.

[30.24] Ganesh: How is your company equipped to address the challenges like Spoofing and wash trading?

[30.38] Ryan: We’re actually not involved with that side of things, and also that’s something we get a lot of queries from. What we do is to gather all the members and educate. That is where local authorities have to look at that and see things like that don’t happen.

[31.40] Ganesh: Does registering Security Tokens with respective financial authorities (For ex,SEC in USA) cost a lot? How are you dealing with it?

[31.53] Ryan: In the US it’s the SEC and in the Netherlands then AFM. That part doesn’t cost you, what costs you; the lawyers; must work with consultants and also know how STO is structured, you could end up paying much for a lawyer firm, who wouldn’t be knowing much about STOs, also charging you hourly for learning about it.

So to start raise capital for the STO, you don’t have to pay for the local authorities, that is for free.

You have to pay for the paperwork until the moment you can actually run the application and then also do marketing. It’s more suited to companies that have some yearly revenue a few years already running.

[33.52] Ganesh: Can you give us a tentative figure of what it would take to hire the consultants, lawyers?

[34.04] Ryan: So far what we’ve seen is, which might change in a few countries. It might charge somewhere between 200 and 500,000 dollars. It also depends on the kind of STO you run, that is why it is more for companies that have some revenue.

[34.51] Ganesh: This can have significant obstacle for startups looking to get into STOs, right?

[35.05] Ryan: Yea, I think at least at this moment, there is no early stage startup that plans to do seed round. Because they would run out of money before even starting. For a startup that I’ve already raised, Round A for example; they got 6 million or a 3 million and for the next round they could do a security token offering. They can use the part of the money that is raised for the next round and get smaller investments.

[36.11] If you are a startup and don’t have much of a traction, and you have to raise part of your company, basically to raise capital. You have to give away your equity and lose your control; my advice to them would be to grow a little bit and get some revenue and with that you can do a security token offering.

With this valuation will be bigger, and you have to giveaway less of your equity, if done it a year ago or two years ago.

[38.04] Ganesh: There seems a lot of restrictions set by exchange platforms. (Ex: Binance – requires formal proof from a lawyer on every token request). What’s your take on this?

[38.19] Ryan: I think there will restrictions in a normal crypto exchange and at the end of the day, this is something good; I mean I don’t mind me giving information to an exchange, if at all it allows me to trade. Whereas in the case of crypto to crypto exchanges, it stays optional, but in case of Binance, they ask if you want to increase the amount of trades you wish to do then you have to provide more personal information in comparison with STO exchange where you have to provide information when you open an account.

[39.30] Ganesh: Can we see this as a good outcome?

[39.34] Ryan: this is a great outcome if the industry has to grow and not crash like the ICO market, and therefore it has to be more compliant and the only way to do that is do KYC and AML properly.

[40.00] Ganesh: Does your company have any plans to offer a dual token structure like ‘Utility-Security’?

[40.07] Ryan: No. We don’t have any plans for doing STO for our company. We want the industry to grow; communicate with the community and help them as much as we can. Right now, we don’t have any plans of doing security token offering.

[40.35] Ganesh: Would you like to share something with our viewers?

[40.41] Ryan: This year will be big for the industry and see many businesses running security token offering. The other day I was talking to a company which is thinking of doing a security token offering of 100 million Euros.

[41.35] I’d like to thank you for the for the interview and your viewers. Also if you want to follow what’s happening on the security token market mainly just go to and join our newsletter, we keep you informed on everything that is happening in the security talking scene.

[42.12] We also do meetups. For the ones that are seeing this in Europe, we will be in your in your country soon. If you’re in the Netherlands, we’re running a meet up on the 20th of February.

[42.29] We’re planning to do a bigger conference in the beginning of the summer in Europe about security tokens.

[42.41] Ganesh: Thank you very much Mr. Ryan. Thanks for your time and sharing your thoughts. And we appreciate your taking time to get you in I’m setting you on a mission and the thoughts of all those people. It’s really very educated.

[42:54] Ryan: Thank you very much.