Business 12 April 2019

Ed Drake

‘Initial exchange offerings’ criticized as ICO alternative

A number of cryptocurrency commentators have criticized the growing trend for Initial Exchange Offerings, or IEOs, as an alternative to the discredited ICO model, according to media reports.

First reported by Bloomberg this week, key voices from the blockchain community are becoming increasingly concerned with the tendency towards IEOs, amid a backdrop of declining activity in the ICO space.

IEOs see the exchange acting in the role of underwriter for token issues, both vetting and operating the sale on their own basis on behalf of investors. According to reports, the model has sprung from the ashes of ICOs, following increasing regulatory pressures against companies raising capital through token sales.

According to data on CoinSchedule.com some $180 million has been raised since February across 23 individual IEOs.

While the legal position for ICOs in some respects remains unclear, the position is even less clear for IEOs. And according to securities lawyers, IEOs are more likely to fall under securities regulations than their predecessor.

Zach Fallon, a lawyer who has worked with the SEC on ICO issues, said IEOs “take everything from an ICO and make it worse.”

Meanwhile, Jeff Dorman of Arca Funds said that by introducing intermediaries, IEOs were undermining the decentralized ethos of the technology. He told the news outlet, “The irony of course is that this is directly at odds with the decentralized ethos embedded in crypto, but this has been conveniently ignored as long as it’s working.”

This is compounded by concerns that exchanges have so far used IEOs to promote native tokens, and have in some cases required investors to hold large balances in native tokens to participate in sale events.

Fallon said this was even more likely to make IEOs fall within legal definitions of ‘securities,’ a factor which would cause further problems with regulators.

The IEO model was pioneered by global exchange giants Binance, which has since held a number of IEOs in support of the BitTorrent token and Fetch.AI. Similarly, Bittrex held its inaugural IEO in early April, after cancelling a scheduled sale in Malta the previous month over regulatory concerns.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

The Bitcoin Vision: Episode 10

Business 18 April 2019

The Bitcoin Vision: Episode 10

Founding President of the Bitcoin Association Jimmy Nguyen is back in London for this week’s episode of The Bitcoin Vision, and he’s reunited with his crew who are equally excited about BSV’s latest big wins.

Read More
Dr. Craig Wright files formal libel claim against Bitcoin podcaster Peter McCormack

Business 18 April 2019

Dr. Craig Wright files formal libel claim against Bitcoin podcaster Peter McCormack

Dr. Craig Wright files formal libel claim against Bitcoin podcaster Peter McCormack, who publicly accused Wright of fraud over Satoshi Nakamoto identity.

Read More
Jack Liu responds to hasty BSV delistings, launches BSV-powered exchange & wallet

Business 18 April 2019

Jack Liu responds to hasty BSV delistings, launches BSV-powered exchange & wallet

Delisting Bitcoin SV from exchanges has inspired Jack Liu to start trading on his new BSV-powered exchange, FloatSV, earlier than expected.

Read More