Japanese crypto exchange Coincheck on Thursday announced that it is considering to enter the initial exchange offering (IEO) arena and has started a feasibility study for a fundraising business by issuing utility tokens.
IEOs have gained massive popularity in recent months as many companies raised millions. After the significant crash in the initial coin offering (ICO) market with a growing number of weak projects seeking millions, IEOs ensure the authenticity of the projects as they are scrutinized by the exchanges with an assurance of a listing.
Popularized by Binance, many major digital asset exchanges including Gate.io, Huobi, and Bitfinex, now offer IEO platform.
“IEO is recognized as a method that offers a higher degree of trust behind such issuers by screening the issuing body while maintaining the benefits of Initial Utility Coin Offering such as to reduce financing costs, to establish fan-community and ecosystem, and to enable issuers to fundraise without any equity distribution,” Coincheck stated.
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“In this business, Coincheck intends to support issuers’ fundraising upon their requests in the areas of sales of tokens s while screening each subject in compliance with guidelines to be set by the self-regulated organization certified by the Financial Services Agency of Japan.”
Bringing IEOs to a major crypto market
Once the largest crypto exchange in Japan in terms of trading volume, Coincheck was hacked in early 2018, and had $534 million in digital currencies stolen, making it the largest crypto heist so far. While still struggling to restore its operations, the exchange was bought by Monex Group in mid-2018.
With better security in place, the exchange received a green light from Japan’s Financial Services Agency (FSA) in January to resume its crypto trading services.
Meanwhile, the president of Monex Group, the parent of Coincheck, revealed the company’s plans to join the Libra Association to back Facebook’s cryptocurrency project.