A leading crypto exchange has stumped up €15 million to invest in a Malta based blockchain startup, which has grand plans to revolutionize the crypto world. According to data from coinmarketcap.com, Bittrex is the 20th most popular crypto exchange by average daily trade volumes. Palladium has issued a €150 million ICCO – Initial Convertible Coin Offering – to raise funds so it can complete its ambitious project. Interestingly, holders of the tokens will be able to convert them into company shares in three years’ time, making many people wonder why the company didn’t just opt for a bond issue or IPO.
Since Malta passed three crypto-friendly bills into law, the country has quickly become a hotbed for crypto activity, but some have taken the bills too literally. Unfortunately, the bills won’t be fully in place until the end of 2018, causing the Malta Financial Services Authority (MFSA) to tell companies to delay their applications for blockchain licensing.
Palladium Bridging the Gap
Palladium has spotted what it believes to be a gap in the market – a banking and crypto platform crossover. Its finalized platform will combine an EU regulated bank with a crypto exchange, giving its users the ability to store and spend cryptos in harmony with fiat currencies. In order to do this, Palladium is going to use some of the money it raises during its ICCO to purchase Lombard Bank – a bank that the CEO of Palladium has previously attempted to buy.
Once it has acquired the bank, Palladium will have a fully regulated banking platform and EU banking license. It will then merge its banking platform with a crypto trading interface and create a fiat/crypto hybrid bank with physical branches.
Old-School Banking Meets Blockchain
To many this will sound like a new concept, however there is a myriad of other platforms out there that provide the same service. Revolut does exactly the same thing, just without the physical offices. Interestingly. Revolut goes one step further with its crypto banking revolution and gives users up to 1% cashback in cryptos on any purchase they make. Combining a cutting-edge crypto trading platform with a traditional bank merges the old-school financial services world with the powerful and young blockchain world.
Swap ICCO Tokens for Shares
Palladium has invented the ICCO and will be the first blockchain company to use this financing method. Essentially, in three years’ time holders of the Palladium ICCO tokens will be able to convert them into shares and become shareholders. This implies that the ICCO tokens are virtually worthless, due to the fact they serve no purpose and won’t be traded on any exchange.
The best way to look at the Palladium ICCO is as an early IPO – leading to the question – why didn’t Palladium just do an IPO? An IPO would have allowed institutional investors to pour money into the firm, and blockchain stocks are hot the moment. Perhaps Palladium knows those types of investors wouldn’t put their money anywhere near its project and are opting for the lawless and wild west style type of fundraiser, which requires a lot less due diligence and reporting to be done.
Malta is quickly becoming a blockchain island and to support this, the University of Malta has created a blockchain scholarship fund to help educate the next generation. Palladium has the potential to help Malta transition from a cash-centric society to a digital crypto society, potentially solving many issues that currently stand in the path of budding crypto investors in the process.