Crypto-island Malta is bearing witness to the world’s first Initial Convertible Coin Offering (ICCO) platform. The project is an innovative direction for the island’s significant crypto community and could mark a new chapter in the issuance of crypto-tokens.
Malta is a significant player in the crypto-world, with its government actively embracing all things blockchain. Now the small Mediterranean nation has found itself as the launching ground for a new type of asset. The ICCO is essentially a token that will be convertible into company shares at the end of their 3-year maturation period.
This novel asset type has been referred to as a ‘tokenised convertible warrant’ by the Malta Financial Services Authority (MFSA). It is being launched by Palladium and will be overseen by a prospectus that must be approved by the MFSA in order to make sure it complies with EU financial regulation. After three years the tokens will be convertible into Palladium shares.
Palladium founder Paolo Catalfamo explained his hopes for the project at a press conference:
“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 crypto-currencies.”
Catalfamo is the owner of Investar, a company which owns 85% of the shares of Palladium. Rahul Sood, former CEO of Microsoft Ventures is also a significant shareholder.
The prospect of job creation and economic growth is an aspiration shared by Malta’s prime minister Joseph Muscat. He explained his government’s high enthusiasm for blockchain tech and hopes that Malta will continue to be on the cutting edge and be able to fully exploit the economic niche offered by crypto.
“The three pieces of Blockchain legislation which were passed in Parliament recently form the start of a new exciting journey putting Malta in the [cryptocurrency] frontline.”
Regulation has always been a grey area for crypto and ICOs and often seen to keep big money from entering the space. Malta is one of the few states which has a regulatory framework in place to deal with the crypto-sphere. Catalfamo is very praising of this but sees that more states need to adopt frameworks. He also said the ICCO method is one of the most exciting opportunities in the space.
“Institutional investors recognize the scale of the opportunity, but the lack of regulation has kept them watching from the sidelines. We expect Palladium’s solution will change this. Cutting-edge blockchain technology will allow customers to use regulation-compliant, multi-asset accounts to manage fiat and cryptocurrencies.”
Tokens for Palladium went on pre-sale today with an initial target of €150 million. The subscription for the tokenized convertible warrants will be available from July 25th until September 30th. Investment funds will be used in the following ways, according to Catalfamo:
“50% will go towards the acquisition of a controlling interest in a European bank; 35% into the formation of a regulated crypto-exchange and the development of a clearing and settlement blockchain platform; and 15% into strategic investments in financial services and blockchain companies”.
The resultant Palladium exchange will be a joint venture between Palladium and two other companies. Unikrn which is owned by Rahul Sood and Bittrex, a US-based platform.
Bittrex CEO Bill Shihara said of the project:
“Our partnership will launch a new trading platform powered by Bittrex technology, and its customers will have access to the large selection of innovative utility tokens listed on Bittrex, which we chose using our industry-leading token review process.”
The advent of ICCOs certainly marks a turning point in the evolution of cryptocurrencies, whose products are becoming increasingly complex. It is likely to be a boon to Palladium to have launched in Malta, without a doubt one of the most exciting locations on the blockchain map. The country has taken many steps to embrace the technology in a variety of areas. The government plans to soon launch the “blockchain lab”, whose purpose will be to train civil servants in its use. The University of Malta is also starting blockchain courses this year, with the aim of creating employability in this sector.
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Alex has been putting words on paper since he was old enough to hold a pen; when he bought his first bitcoin in January 2017, those words discovered their place within crypto as well. He holds a master’s degree in international relations from Leiden University in the Netherlands, and his special expertise lies in European cryptocurrency regulation.