The pioneer of online trading Binary.com, which issues securities-backed smart tokens tied to its shares, earlier this month announced plans for an Initial Coin Offering (ICO). Binary’s ICO is designed to protect investors by adhering to best practices of corporate governance, investor disclosure and transparency.
They believe that ICO and their use of blockchain technology can replace IPOs in the future, although they have almost no similarity in the landscape. The ICO is already active and will end on December 25th, 2017.
Jean-Yves Sireau, Binary Founder & CEO, said:
“The next step for a company of our size is naturally to go public by means of an Initial Public Offering (IPO). However, an IPO in itself is a cumbersome process that’s remained relatively unchanged for decades. Some would say it’s ripe for disruption. By opting for the ICO route, we can go beyond the limitations of a traditional IPO.”
“We get a wider reach of potential investors, lower costs of trading and an immutable audit trail of transactions on the blockchain. Through our ICO, we will also establish our trading services among the global cryptocurrency community.”
“We also believe that traditional stock exchanges will gradually be replaced by blockchain exchanges in the coming decade. This ICO will give us an opportunity to establish ourselves at the forefront of blockchain innovation”.
Binary dot com, the profitable company with the proven business mode, offers up to 10 million tokens through an open auction on the website. Each token has two considerable economic benefits for investors.
First, the owner of a Binary token has the right to convert tokens into binary common stocks. Secondly, investors can trade in the tokens on Lykke, a cryptoasset exchange, thereby increasing the value of tokens. Lykke is the Swiss FinTech company which builds the world market connected with the securities.
ICO and exchange of cryptocurrencies provide investors with even more advantages, including the round-the-clock trade, faster estimated time and lower trade expenses.
Financing of the account for exchange of cryptocurrencies with use of Bitcoins or Ether significantly differs from what is used by the traditional exchange broker for whom bank transfer is necessary. Thus, the first of them is cheaper, more simply and quicker.
Besides, ICO reduces the fee paid to several beneficiaries during the IPO including the underwriter and the stock exchange.
It also allows companies to raise funds from the global box of investors and their tokens on any number of exchanges of cryptocurrencies using smart tokens based on a standard protocol. If these companies conduct an IPO, they usually attract funds from investors in the same jurisdiction as the stock exchange, and see their shares.
Thus, all the advantages of an “IPO in a block chain” can not be easily copied by traditional exchanges., but Binary’s ICO could enter a new wave of blockchain.