With mass adoption as one of the primary goals being tackled by the cryptocurrency and blockchain community, solving security and compliance concerns in any of their forms is a critical challenge to resolve. Trevor Koverko, with his background blending Wall Street with Silicon Valley, sought to take this on—and thus Polymath was born. Trevor sat down with BitIRA to share some of what started up this journey.
BitIRA: Tell us a bit more about the Polymath solution.
Trevor: Sure thing. I’ll start off with a bit of backstory to get us going. Before founding Polymath, I was in private equity and always a tech guy. I started acquiring tech companies with a friend from Goldman Sachs. One day we woke up and said, “Wouldn’t it be a great idea if we could tokenize our private equity funds, and we could become the world’s first dividend—and—crypto?” That was really my big epiphany: we could actually have a token that pays a dividend as opposed to one that just goes up and down like a capital gain or a capital loss. So that was the big idea, and we got a lot of buy-in and a lot of my network excited about it.
But as we started building it, it turned out to be a really hard challenge. Crypto is hard to reconcile with securities laws, and what we were trying to do was a security. So it wasn’t like Bitcoin or Ethereum; it was actually more like a stock or or financial security that is regulated and that has all these rules. Unfortunately crypto and financial security laws don’t reconcile very well.
We kind of hit a wall, and we came to realize we might be solving the wrong problem here. Instead of launching this little micro private equity tokenized fund, what if we could create a platform that made it easy for anybody to launch their own asset-backed tokens. So anyone who wants to create a real estate fund backed by a token, or a tokenized company, or a tokenized bond—there’s a whole world of opportunities out there.
That’s how Polymath was born. It was simply a way to solve our own problems to make it easy for any business to launch their own security token or asset backed token.
BitIRA: Of all the things you could have pursued, why crypto?
Trevor: You know, I was in crypto very early in 2012. I bought my first bitcoin on eBay of all places. I don’t recommend that today; there’s better places to buy it. Back then it was crazy; it was all a bunch of nerds, and we were all living in our parents’ basements, kind of nerding out. We loved it. We get nostalgic. Everyone was really passionate about it; it wasn’t about the money back then, and the whole crypto ICO craze hadn’t happened yet. Buying my first bitcoin was a gateway drug to the rest of the crypto world.
Before I knew it, I was advising on all these different projects and participating in an ICO. Then I really fell down the rabbit hole.
BitIRA: What change did you want to effect with Polymath? What were the biggest challenges that you encountered along the way?
Trevor: Regulated industries are tough; they take time, it’s slow, and you don’t get a lot of clarity—which is probably the most frustrating aspect. Not to complain about it, that’s just life and I do think the regulators have done a great job in the crypto space in general. They’ve been relatively hands-off. They’ve let the community flourish. They’ve let us stumble a few times without getting overly aggressive.
But with that said, you know, it is a new dynamic that I’m not used to, which is dealing with really old and arguably outdated security legislation from fifty or even a hundred years ago. All these different acts that came in during 1933-34, which has been a different experience—a learning experience, for sure. It’s been fun to learn how the ‘real world’ works when it comes to regulated industries like like finance.
BitIRA: What are you most looking forward to seeing the crypto and blockchain community tackle next?
Trevor: There’s a lot to be excited about. For me, it’s all about security tokens. With what we identified early, we’ve seen a lot of growth and a lot of infrastructure getting built. The challenge with security tokens is it takes many different stakeholders working in unison for something to happen. If one link in the chain is broken, then the whole thing falls apart. It‘s not just ICOs but also like unregulated utility token projects that don’t have the same registration rules. They don’t have to get the regulators on board. They don’t have to get the subsidy providers on board. They don’t have to get the insurance folks on board. They don’t have to get the investors and issuers to legally come together.
You need to really focus on community and you need to focus on partnerships. For anything to happen, you need all these different stakeholder groups to work together. That’s one of the things that I enjoy the most: the teamwork, and the work with the other stakeholders here.
BitIRA: Did you have any other comments you wanted to end with?
Trevor: If you’re interested in crypto or investing in crypto, have a thesis. Lsten to some of the smart folks in Silicon Valley who have developed really strong kinds of analysis and investment theses.
Keep an eye on security tokens. I think that’s that’s where a lot of the action is going to be as the rest of this infrastructure is getting built. This is the kind of space that you want to at least be keeping an eye on, even if it’s not your forte.