Malta See’s The World’s First ICCO - Initial Convertible Coin Offering, But What Is It?
Yesterday, The Malta Times reported on the worldâs first ICCO, a regulated Initial âConvertibleâ Coin Offering. You can see the full report for yourself, here.
What is an ICCO?
First off, this ICCO is regulated by the Malta Financial Services Authority so therefore meets a range of stringent restrictions designed to make investment safer. The next part of this, the part that makes it unique is the idea of conversion. Within this, investors are able to use their purchased ICCO tokens, to convert them into shares of Palladium in three years time. Palladium are the company in Malta behind the ICCO.
According to The Malta Times:
âThe issuance of a tokenised convertible warrant, which is regulated by a prospectus approved by the Malta Financial Services Authority will give investors the right to convert tokens into shares of Palladium three years after the issue date. Palladium chairman Prof. Paolo Catalfamo said this project had the potential to create 100 jobs and bridge together traditional financial service and cryptocurrencies.â
Much like an ICO, the end goal of this is to raise money for Palladium. Furthermore, according to The Malta Times:
âThe fundraising target is â¬150 million and the pre-sale of Palladium tokens started on Tuesday. The offering period for subscription of the tokenised securities will run from July 25 to September 30. Proceeds will be used to support the three core blocks of Palladium's solution: 50 per cent towards the acquisition of a controlling interests in the European Bank, 35 per cent into the formation of a regulated crypto exchange and the development of a clearing and settlement blockchain platform and 15 percent into strategic investment in financial services and blockchain companies complementing Palladiumâs business.â
The overall objective for the ICCO, as opposed to a standard ICO is to allow a coin offering to not only meet criteria established by financial authorities, but also to ensure that investors have peace of mind with their investment. In three years time, they have the chance to use their tokens to purchase shares of a growing company and moreover, this is a regulated event meaning, if things go wrong, investors will likely get their money back (theoretically at least).
Should this prove successful, we could very well see more companies adopt an ICCO style coin offering in order to legitimise their money raising activities. Moreover, investors may start to be more attracted to this style of fundraising in the future. Perhaps within this, Palladium have developed a concept that will soon see big changes to the whole ICO landscape?