The world’s first initial convertible coin offering (ICCO) is launching in Malta. The company behind the initial convertible coin offering are known as Palladium. This is a new take on the ICO model which has demonstrated a number of disadvantages.
Effectively, what Palladium has done is provide exposure to tokenized securities while operating within the confines of an existing regulatory infrastructure. Palladium is also seeking to build a regulated cryptocurrency exchange in Malta. The primary difference between an ICO and an ICCO is that investors can convert tokens into company shares.
The initial convertible coin offering (ICCO)
The tokenized convertible warrant is regulated by a prospectus which is approved by the Malta Financial Services Authority. Investors will have the right to convert tokens into Palladium shares three years after the date of issue. According to Palladium founder Paolo Catalfamo –
“We expect this project, which will create more than 100 job opportunities, to be a historic landmark and to bridge the gap between traditional financial services and crypto-currencies…Institutional investors recognize the scale of the opportunity, but the lack of regulation has kept them watching from the sidelines. We expect Palladium’s solution will change this.”
The ICCO model represents a welcome change in an ICO industry that is in dire need of a restructure. The ICCO is fully regulated, so investors do not have to worry about their investments. The tokenized convertible warrants are subject to EU rules. Regulatory uncertainty is a huge obstacle to adoption, and the ICCO model should serve to encourage investment in the industry. The pre-sale of Palladium tokens started on July 9th.
A friendly regulatory environment
Malta is known for being very friendly towards distributed ledger technology. Recently, there have been a large number of positive announcements from the region. Three Maltese blockchain bills were passed in early July, making it the worlds’ first jurisdiction to have a comprehensive regulatory infrastructure covering all aspects of distributed ledger technology, cryptocurrency, exchanges, and ICOs.
Degree courses in blockchain technology are soon going to be offered in Maltese universities, though there is a shortage of qualified professors due to the rapid expansion of the sector. In May Prime Minister Joseph Muscat welcomed the Binance exchange to the country, and they are creating a new type of decentralized bank in the region. Token holders are to be co-owners of the new bank.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.