Initial Exchange Offerings: The Lawyer’s Dilemma

The Initial Exchange Offering (“IEO”) offers a return to the heady days of ICO-driven 2017

Photo by Melinda Gimpel on Unsplash

The legal tail should not wag the business dog . . . and this is not to be construed as legal advice.[2]

The Initial Exchange Offering (“IEO”) offers a return to the heady days of ICO-driven 2017 — millions of dollars in seconds that is free from the tyranny of regulatory uncertainty. Money that comes without the need to push a project all over Sand Hill Road (and shill til’ you can’t no more).

In an IEO, a cryptocurrency exchange manages the token offering and sale process. The process solves many of the offering’s logistical issues:

• The exchange already performed the required Know Your Customer (“KYC”) procedures on their account holders (to whom they will sell the tokens);
• The exchange is also in a position to receive payment for the newly issued tokens from its purchasing account holders without the need for a separate escrow or custodian;
• The exchange may act as a sophisticated party conducting diligence on the issuer’s management team and the viability of the project.

Moreover, the IEO brings the added advantage of instant investor liquidity on a major cryptocurrency exchange.[3] Further, unlike the ICO, the IEO is…