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Binance IEOs Outperform Competing IEO Projects – Thought Leaders

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Binance IEOs Outperform Competing IEO Projects - Thought Leaders

Over the past 12-month IEOs (Initial Exchange Offerings) have replaced ICOs (Initial Coin Offerings) as the fund-raising method of choice for blockchain companies. There are undeniable advantages to IEOs compared to ICOs.

One of the biggest advantages is there’s a reduced risk of investment funds being siphoned from a hacked website. One example of this happening to an ICO is the Etherparty hack whereby hackers discreetly modified the Ethereum address displayed on the ICO website to reroute incoming investments to a Hacker’s Ethereum address.

The barrier to entry to launch an IEO is also significantly higher than an ICO, which is beneficial to investors. Trusted exchanges will (in theory) only list reputable projects after they perform extensive due diligence. Compare this to ICOs, many of which copy and paste existing whitepapers, create fake founder LinkedIn profiles, and then advertise to unsuspecting investors using Google Adwords.

In this sense, IEOs are a much better alternative to ICOs. Investors have a much easier time both accessing the fundraising opportunity as well as funding the investment. This is provided in a safe (but unregulated) environment as provided by the exchange. Different exchanges offer differing parameters for listing an IEO. For instance, we noticed much higher quality IEO listings with market leading exchange Binance, and Kucoin, versus some of the smaller exchanges such as LAToken and Yobit.

While IEOs provide financial benefits to both the host exchange and startups, the same cannot be stated for the financial benefits that are offered to investors. From crunching the numbers IEOs have to date performed poorly.

In researching this article we reviewed IEOs from all major exchanges. Over 50% of the IEOs on smaller exchanges were not listed on CoinMarketCap.

Nonetheless, there were some surprises. While the majority of IEOs performed poorly and provided negative returns on the majority of exchanges, Binance was the odd exchange which actually had a higher number of tokens outperform the market. This was especially true for IEOs launched in 2019.

Below we track the launch date of several IEOs on the Binance exchange, the amount raised, as well as the IEO sale price of each token and the current market value of each token. The reason we do not use market map is that this number is very misleading for investors, as the total market cap includes the entire value of a token project, versus the IEO tokens which were initially sold to investors.

These numbers are based on publicly available data and may not be 100% accurate.

Binance IEOs:

Company:IEO Date:Raise:Initial Token USD:Current Token USD:
BreadDec 201732M0.8550.223078
GiftoDec 20173.4M0.10.017310
BitTorrentJan 20197.2M0.00012 0.000634
Fetch.AIFeb 20196M0.0867 0.061525
Celer NetworkMarch 20194M0.0067 0.005940
MaticApril 20195M0.002630.014397
HarmonyMay 20195M0.00650.008229
ElrondJuly 20193.25M0.00050.001945
WinkJuly 20196M0.000066730.000245
PerlinAugust 20196.7M0.07743 USD0.060321

Unfortunately, other exchanges did not fare so well. Some exchanges performed so poorly with the IEOs that they offered, that we could not find the market value of the tokens listed anywhere.

In conclusion, what is currently more important than the actual project being listed, is where the project is listed. We anticipate that once regulated security tokens increase in popularity, that IEOs may be an enticing option to list these security tokens on regulated exchanges. This would be similar to how stock exchanges currently operate.

Disclaimer: While I have previously held BRD & BTT tokens, in September 2019, I did not hold any of the IEO tokens as profiled in this article.

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Antoine Tardif is the CEO of BlockVentures.com, and has invested in over 50 blockchain projects. He is also the founder of Bitcoinlightning.com a news website focusing on the lightning network, and a founding partner of Securities.io

Exchanges

DX.Exchange Goes Bankrupt – CX Technologies Ltd

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DX.Exchange Goes Bankrupt - CX Technologies Ltd
The Estonia-registered crypto exchange, DX.Exchange announced that the company had begun bankruptcy proceedings. The news was somewhat expected after the company closed its doors just a few weeks earlier due to a petition filed against the firm by employees awaiting payroll. Company officials say they have no money left in their bank accounts. Now, a slew of workers and business affiliates await court proceedings.

Bankruptcy Petition

The official bankruptcy petition filed on Oct. 24 alleged that the DX.Exchange owed 78 former employees payroll for the months of September and October. These employees included a variety of workers from CX Technologies Ltd., the company behind DX.Exchange. The petition sought to have the exchange dissolved by an Israeli court.

Unpaid Suppliers

Additionally, a host of suppliers have taken suit against the company. These suits run the gambit from unpaid bills to the alleged fraud. The well-known cybersecurity firm, White Hat Ltd is one of the company’s claiming losses due to DX.Exchange actions. Another lawsuit lists Bee2See Dotan B.S. Solutions. This is the firm that handled DX.Exchange targeted marketing. Even the company supplying the servers never got paid – Malam Team.

Writing on the Wall – DX.Exchange

Employees and suppliers knew to take action earlier in the month after the firm closed its doors unexpectedly. At the time, DX.Exchange owner Pinhas Patarkazishvili cited the rising costs and dwindled profits the exchange had left. He told employees that he was searching for a merger or acquisition and if that he was unsuccessful, the company would permanently cease operations.

DX.Exchange

The much-hyped DX.Exchange promised to deliver an efficient trading experience on the blockchain. The company planned to trade all types of cryptocurrency including security tokens. According to the company’s documents, the exchange had agreements to list some big-name tokenized securities such as Tesla and Apple stock.
DX.Exchange
DX.Exchange

Security Tokens on the DX.Exchange

When questioned about the security token aspect of the exchange specifically in a recent interview, DX. Exchange CEO, Daniel Skowronski explained that the company applied for an MTF (multilateral trading facility) exchange license under a different entity but never completed the requirements prior to filing for bankruptcy.

Shady Dealings

Interestingly, this story goes much deeper. Apparently, it was reported that Limor Patarkazishvili (DX.Exchange owner’s wife) was the sole owner of another firm that was raided by the FBI in 2018. The company, SpotOption, allegedly was a major player in a large international binary options scam. When investigators delved deeper, they discovered that both companies shared staff.
At first, the DX.Exchange denied any involvement in SpotOption. Eventually, it came to light that Limor Patarkazishvili was the main shareholder in the firm. She owed 99 percent of the shares. This discovery only fueled speculation that the couple wanted to skip out on their past-due payments.

Will Employees and Affiliates Get Paid?

Skowronski publicly claimed that his company is not in “an exit scam.” Unfortunately, this was right before the company closed its doors. For now, the holidays could be bumpy for employees of the DX.Exchange as they attempt to cope with the financial losses.
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Exchanges

VNX Exchange Launches, Calling Luxembourg Home

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Platform Launch

While there are many hurdles yet to be cleared on the way to the mainstream adoption of digital securities, there is one that remains obvious. This would be a lack of marketplace solutions within the sector.

Marketplace solutions are vital, as they are what will provide industry participants with the promised, and anticipated, liquidity often associated with tokenized assets.

Looking to fill this void in the sector is VNX exchange. The Luxembourg based company has just announced the launch of their digital assets issuance platform, which will work to facilitate the tokenization and sale of assets.  VNX indicates that the potential for a secondary market launch will be evaluated in time.

In an event held to mark the launch of the platform, the company even drew praise from the Luxembourg Minister of Finance, Pierre Gramegna. He stated,

“VNX is one of the success stories of Luxembourg House of Financial Technology, the LHoFT”

A Place to call Home

For those that follow the digital securities sector, a geographical trend may have been noted. With forward thinking regulations, and industry clarity, Luxembourg has begun to establish themselves as a nation open to blockchain based endeavours. This has resulted in more than just VNX calling the European nation home. The following companies are just a couple of examples of this.

Competitors

While the VNX launch is a positive development for the sector, they are not the first to the table, and will not be the last. The following companies stand to be a two of the major competitors in the same space in which VNX is looking to carve out a place.

Hot Start

Wasting no time in the launch of their services, VNX is providing investors with access to an STO straight out of the gate.

This event will see Korean based, Streami, issue €3 million worth of digital securities. The company itself is solution provider within the world of blockchain through services ranging from a cryptocurrency exchange, to custody, and fiat gateways.

The event garnered commentary from representatives of each, VNX and Streami.

Alexander Tkachenko, CEO of VNX Exchange, stated,

“Streami offering demonstrates the real use case of asset backed tokens to finance VC investments.”

Junhaeng Lee, CEO of Streami, stated,

“I strongly believe in the development of the assets-backed digital financial instruments. VNX offering shows how fundraising for VC industry may evolve and by extension implications to the financial industry. I am very excited and proud that Streami is the first offering presented at VNX platform.”

To learn more about the structuring of these digital securities, make sure to peruse the Streami investor deck HERE.

VNX Exchange

While first conceived in 2017, VNX exchange was founded in 2018. The company operates within Luxembourg, and hopes to transform FinTech through their platform.

CEO, Alexander Tkachenko, currently oversees company operations.

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Exchanges

Tokai Tokyo Financial Holdings to Bring Digital Securities to Japan

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Japanese Expansion

After spending months developing within the confines of the MAS FinTech Sandbox, digital exchange, ‘iSTOX’, looks to take its first large step forward – towards Japan.

It was recently

announced that Japan based, Tokai Tokyo Financial Holdings, has acquired a minority share of ICHX Tech (iSTOX ‘mother-company’).

This move represents a first for iSTOX, as the company looks to eventually offer their services to investors worldwide.

Investment Details

iSTOX has had a successful year, as they have been on the receiving end of various investments over this time. The first major example would be the globally renowned, Singapore Exchange (SGX), followed by a series of companies in the following months.

SGX Invests in iSTOX to Develop Security Token Platform

iSTOX Exchange Completes Series A Funding

This latest investment, which totals $4.58M, equates to a 4.58% share in ICHX Tech. By acquiring the position, it is expected that digital securities, hosted on the iSTOX platform, will now be available to Japanese investors; this being possible through the brokerage capabilities of Tokai Tokyo Financial Holdings.

MAS FinTech SandBox

One of the reasons behind the success experienced thus far by iSTOX, can be owed to the fact that they are one of a very select group to be admitted into the Monetary Authority of Singapore (MAS) FinTech Sandbox.

This program allows for companies to trial new technologies and products, within a structured environment, allowing for continued public/client protective measures.

MAS FinTech Sandbox Welcomes Capital Markets Platform ‘iSTOX’

iSTOX

iSTOX is a subsidiary of Singapore based, ICHX Tech, which was founded in 2017. The company is fervently working to develop, and attain, adoption for their digital securities exchange. This platform, which is currently operative and accessible by accredited investors, is expected to make a full launch in Q4 of 2019.

CEO, Danny Toe, currently oversees company operations.

The team at iSTOX recently announced new growth, as they welcomed a new CCO – Oi Yee Choo. The following article takes a closer look Oi Yee Choo and what she brings to the table.

UBS Managing Director Oi Yee Choo Becomes iSTOX CCO

Tokai Tokyo

Operating out of Tokyo, Japan, Tokai Tokyo Financial Holdings is an investment firm, which was founded in 1929. The company is able to offer its clientele a variety of services, pertinent to securities, such as brokerage, distribution, and more.

Company operations are currently overseen by CEO, Tateaki Ishida.

In Other News

Singapore has rapidly established themselves as a leader within digital securities. With clear regulation, and forward thinking, companies have been able to effectively establish themselves within the Asian nation. The following articles are a few examples, highlighting industry moves which involve Singapore.

1X Launches as First Licenced Private Securities Exchange in Singapore

Propine Accepted into MAS FinTech Sandbox

Singapore Halts STO for Regulatory Breach

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