Blackmoon, an FCA-regulated blockchain company, is selling a token pegged to the price of Chinese mobile phone company Xiaomi – but Xiaomi says that the connection is entirely one-sided.
Xiaomi is a Beijing-based consumer electronics company founded in 2010. It has been China’s leading mobile phone brand since 2014 and is now is the world’s second-largest manufacturer of smartphones. The company employs 15,000 people, and CEO Lei Jun has a net worth of approximately $12.5 billion.
It recently announced an initial public offering, which is when a company first puts its shares up for public sale at an exchange. Xiaomi is valuing itself at $4.7 billion on the Hong Kong stock exchange, which is considered disappointing because the figure was initially $10 billion. It will start trading on the 9th of July.
According to the South China Morning Post, the company has not approved Blackmoon’s token sale.
Blackmoon is a company offers “a platform for asset managers to create and manage tokenised investment funds,” according to an expensively-produced introductory video on its website. It says that it offers the best of both worlds, using the advantages of blockchain technology to invest in real-world investments.
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It is offering a token called the BMXXMI, which is “referenced by the shares of the Xiaomi Corporation.” It explains that interested parties will buy BMXXMI tokens from Blackmoon with cryptocurrency. Blackmoon will then convert the cryptocurrency to fiat through a brokerage which will apply for shares in Xiaomi during the IPO. The tokens can be transferred between users and will become redeemable 93 days from the IPO date.
CEO Oleg Seydak told the South China Morning Post that many people expressed an interest in investing in Xiaomi with tokens. Chief Operating Officer Sergey Vasin said that the company is targeting those who may not be able to directly invest in Xiaomi.
He said that tokens had been sold in France, Germany, and the UK. Funnily enough, they are not available in Hong Kong or mainland China where ICOs are banned.
A Xiaomi spokesman told the South China Morning Post that the company does not approve of or endorse the token sale, nor was it aware that it existed.
Commenting to Finance Magnates, Blackmoon said: “We have conducted substantial research and structured the product in such a way to ensure it is aligned with the requirements of the jurisdictions in question, including our ability to participate in the IPO offering of Xiaomi and subsequently distribute the tokens. The token sale is subject to residency restrictions and is not available to the residents of Hong Kong and mainland China.”