Bittrex, an American cryptocurrency exchange, has bought a 10 percent stake in a Maltese blockchain company called Palladium.
ICO + IPO = ICCO
Palladium aims to bridge the gap between initial coin offerings and initial public offerings by making its tokens exchangeable for shares.
This is significant because in most places the distinction between the two is not clear. As a rule, blockchain startups do not see their tokens as being shares, but there are several lawsuits currently running in the US over exactly this issue. In August, Bittrex joined a new US self-regulatory organisation called the ‘Virtual Commodity Association’, which is becoming a standard tactic for companies operating in jurisdictions where the law has not yet legitimised the cryptocurrency industry.
Palladium aims to raise 150 million euros in its ICO, or rather ICCO, which is due to end in September. Its ‘initial convertible coin offering’ makes the sale more closely resemble a traditional IPO because investors can convert the tokens to shares three years after the issue date, according to Malta Chamber.
Paolo Catalfamo, founder and chairman of Palladium, is also the head of two major Maltese financial companies – Investar, an asset management company for high net worth clients, and GlobalCapital, a Maltese life/health insurance company which has €25 billion under management. In March, the latter made a binding offer to purchase 49 percent of Lombard Malta Bank. The Maltese government owns 49 percent of that bank too.
Palladium was launched at the Malta Stock Exchange in an event attended by the island’s prime minister and finance minister. Catalfamo said at the time: “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 cryptocurrencies.”
Bittrex, founded in 2013, is based in Seattle. It handled $60.9 million in trading volumes over the last 24 hours, according to coinmarketcap.com. It is investing in Palladium along with Unikrn, a gaming company, also from Seattle, which is run by one Rahul Sood.
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Sood said in a recent Medium post that Palladium will be”first regulated unified platform for fiat banking and cryptocurrency exchange,” adding: “There’s a reason Unikrn was tapped for this project: we created the idea alongside some veterans of insurance, finance and investment.”
According to the companies involved, 50 percent of the 150 million euros is supposed to go towards acquiring a European bank, 35 percent will go into developing the exchange, and 15 percent will be used to acquire other useful companies.
In July, Malta became the first country in the world to enact complete cryptocurrency legislation. It has attracted some of the biggest cryptocurrency companies in the world as a result of this approach. Palladium and its high-level connections on the island demonstrates the ongoing integration of cryptocurrency into the island’s financial system.
Bitcoin Gold leaves Bittrex
Two days ago, Bittrex delisted Bitcoin Gold because it didn’t receive a requested fee of 12,372 BTG ($264,760). According to a statement from the latter, the demand for payment is because hackers managed to double-spend BTG using that exchange. $18 million worth of BTG tokens were stolen in total.
The Bitcoin Gold team decided not to pay, saying that it “took every reasonable step to try to help ensure Bittrex’s safety against this threat.”
Bitcoin Gold is a fork of Bitcoin created in Octboer 2017 with the specific purpose of excluding ASIC mining devices from verifying transactions, so that it can be mined by people with their household computers.