The Listed Company Coin Offering (
“LCOs are the source of growth with the greatest potential. Listed companies have the resources to sponsor innovation and the legal standing to offer coins without provoking challenges,” said Hong Kong ICO-STO advisor James Hui, who is a specialist in LCOs.
“We are seeing increasing activity here,” he added
Lawyers like the LCO, because it obviates much of the legal challenge in doing either an STO or an ICO.
“LCOs seem very interesting to use because they can afford much more security and protection as well as a higher degree of legal certainty,” explains Christiana Aristidou, a Limassol, Cyprus-based technology lawyer and cryptocurrency law expert.
A website, listedcocoinoffering.com, will launch in early January to track LCOs and the reaction of regulators around the world.
There has been much discussion about whether a listed company could launch a utility-token based ICO, or whether it would have to be an STO.
For the Singapore Stock Exchange, both are possible. The SGX has just released guidelines for listed companies that wish to do a classic ICO:
1 – Any listed issuer that intends to carry out an ICO is expected to consult SGX RegCo beforehand. To facilitate the consultation process, they require the listed issuer to provide a
2 – SGX retains the right to require additional opinions to be obtained so as to ensure that the relevant statutory requirements are complied with. They will also provide a checklist to the listed issuer on the compliance matters that should be addressed.
3 – When the issuer initially announces its ICO, the following disclosures must be included so that shareholders of the issuer are apprised of the fund-raising:
• The rationale for, and risks (including operational,
• The use of funds raised and key milestones to be achieved in utilising the funds;
• “Know-your-customer” checks to be conducted to address money laundering and terrorist financing risks;
• The accounting and valuation treatments for the ICO;
• The use of existing issuer funds to conduct the
• The financial impact on the issuer as a result of the token issuance as well as
• Any impact on existing shareholders’ rights; and
• Any other information as SGX RegCo thinks necessary.
4 – The issuer can also consider holding sharing sessions with shareholders to ensure that they fully understand what an ICO entails for the issuer, thereby enabling shareholders to make informed decisions about the issuer in respect of the ICO.
5 – The listed issuer must also come to an agreement with its statutory auditors on the scope of the audit which should provide assurance that the ICO has been properly accounted for in their financial statements, and that associated risks have been adequately addressed and milestones on
6 – Post-ICO, SGX RegCo would expect the listed issuer to keep its shareholders informed of material information, the development of the ICO and digital tokens on a timely basis, as well as the use of ICO proceeds, among other such crypto-currency related disclosures.
Certainly, Asia is the source of several major LCOs. The Japanese real estate firm Ruden, listed on the Tokyo Stock Exchange, will launch the ICO in Singapore to develop its Ruden Real Estate Online Service Platform with the blockchain. The platform is designed for matching real estate sellers and purchasers.
“With the help of Ruden smart contracts, we will improve the efficiency of real estate transactions and make every transaction tamper-resistant. At the same time, we will tackle the problems such as major geographical restrictions on real estate transactions, limited currency exchange, long transaction cycles and high handling fees,”
the press release explains.
“The seller releases the property data that has been confirmed on the platform, and the uploaded data on the platform will be recorded on the blockchain, forming a Ruden smart contract for the property. The property uses the stable currency Yen Coin as its denomination unit. The buyer searches for a suitable real estate through the platform and pays to the smart contract deployed by the real estate. The Ruden Coins will act as tokens in place for transaction fees,” it continues.
Ruden has not yet set a date, nor fixed the soft and hard caps for the ICO, but it will have the privilege of being the second LCO to take place.
The first is almost over, ending on Dec. 31. It is launched by Naga, a Deutsche-Boerse-listed fintech group, founded in 2015, and which was taken public on the Frankfurt Stock Exchange (Deutsche Boerse) in July 2017. As of November 2018, it had a market capitalisation of around €300 million.
Naga made its first money with SwipeStox, a crypto-based trading platform, and has expanded into crypto trading. To fund further expansion, Naga decided to hold its own token sale. To date, they have raised almost $16 million out of the $20 million they were planning to raise in the sale.
“We are expecting quite a few down the pipe in the coming year,” Hui says.