Leading US-based crypto exchange Coinbase is considering to launch a proprietary token to jump in the initial exchange offering (IEO) arena, Kayvon Pirestani, the exchange’s head of institutional sales in Asia, revealed.
Speaking at Coindesk’s Invest: Asia conference on Wednesday, Pirestani said that the exchange is exploring the idea of launching platforms for IEO and security token offerings (STOs).
“We think there’s a really interesting opportunity there for Coinbase,” the executive said during a panel discussion. “In a nutshell, Coinbase is carefully exploring not only the IEO space but also STOs. But I can’t make any formal announcements right now.”
He also revealed that the exchange is eying to launch the IEO platform in the next few months, while the prospect to launch a regulated STO platform might take some time.
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ICO vs IEO
With the burst of the initial coin offering (ICO) bubble, many credible blockchain projects are flocking towards IEO’s to raise funds. Though similar to ICOs, IEOs are backed by major crypto exchanges, meaning the projects undergo rigorous scrutiny and vetting before the fundraising attempt. It also guarantees a listing on a major exchange, which facilitated the token sale.
Popularized by Binance, most of the major crypto exchanges including Bitfinex, OKcoin, and Kucoin now offer a platform to conduct token sales. Japanese crypto exchange Coincheck is also considering to jump into the IEO industry.
Are STOs overhyped?
To pave its way to offer securities in the US, Coinbase received approval for the acquisition of three companies last year – Keystone Capital Corp., Venovate Marketplace and Digital Wealth LLC – which granted it broker-dealer licenses.
Per Pirestani, STOs have received a lot of attention in the industry. However, the trading volume associated with them is still less. To play safe, the US-based exchange will wait for more market demand for STOs.