The crypto-industry is witnessing the rise of IEOs in response to the need for alternative project financing methods. An IEO is a token sale where a crypto-exchange facilitates the sale on the issuer’s behalf.
In an Initial Coin Offering (ICO), the investor sends the funds directly to the token issuer. On the other hand, in an IEO the buyer creates an account with the exchange hosting the offering and sends the funds there. The buyer then receives the tokens from the exchange itself. Therefore, the exchange acts as the middleman between the token issuer and the investors.
An IEO offers a number of advantages, such as:
- Tapping into the user base of the hosting exchange;
- Immediate liquidity for the token;
- Requiring a lower marketing budget;
- Affording added confidence to potential buyers since the exchange screens the project before permitting the launch of the IEO;
- Providing added security as the exchange also carries out its own KYC/AML checks on the buyers;
- Buyers can pay for tokens in all the different currencies (fiat and altcoins) accepted by the exchange;
- Eventually listing the token on the hosting exchange will be a natural next step.
A Maltese entity launching an IEO is considered as being an Issuer under the VFA Act (assuming that the tokens classify as VFAs). In this case, the issuer is required to comply with the provisions of the VFA Act.
Our team at E&S Group is able to assist you in launching an IEO and ensuring full compliance with the VFA Act. Contact us for more information!
Dr. Anton John Mifsud
Anton graduated as a lawyer in 2009 and was admitted to the Maltese Bar in 2010. He holds a Bachelor of Laws, a Masters in Financial Services as well as a Doctorate in Law from the University of Malta and is a member of the Malta Chamber of Advocates. He has worked for a number of years with one of the largest law-firms as well as the largest fund administrator in Malta where he gained valuable experience in corporate and financial services law. He was appointed Head of Legal at E&S Consultancy Ltd in September 2018 and since July 2019 he also oversees the operations of the company’s corporate services department. He regularly advises international clients with respect to the conduct of their business activities in Malta and is also involved in the negotiation and conclusion of agreements on behalf of clients. Anton specialises in corporate, commercial, financial services and fintech law (covering areas such as ICOs, IEOs, STOs and the licensing of crypto-operators).
Anton is fluent in English and Maltese.
Phone:+356 2010 3020
Dr. Jade Fenech
Jade joined E&S Group as a legal associate in 2018. Before joining E&S Group she practised with a litigation firm for two years. She holds a Bachelor of Laws Degree and a Masters of Advocacy from the University of Malta and was admitted to the bar in 2019. Her primary areas of practice are corporate and commercial law, financial services and fintech.
Jade is fluent in English and Maltese.
Phone:+356 2010 3020