WSJ: IEO on Binance costs startups 2-5% of the amount raised

About $ 518 million was raised with help 63 initial exchange offerings (IEOs) from January to May current year, reported in a conversation with The Wall street journal Director of Digital Currency Research at TradeBlock John Todaro.

WSJ: IEO on Binance costs startups 2-5% of the amount raised

“This is something like ICO 2.0,” said the managing partner of the investing in digital assets Quail Creek Ventures Michael Conn. – Scammers do not sleep. Many got burned at the ICO. I think the same will happen with IEO “.

One of the most successful platforms in the context of the conducted IEO – Binance – takes 2-5% of the attracted amount for its services, said the representative of the project, the tokens of which were placed through the Binance Launchpad. In addition, the platform earns on commissions after the start of trading..

EToro analyst Mati Greenspan considers IEO to be an improved ICO due to reputational risks, which are carried by exchanges during their conduct. “People proceed from the fact that exchanges don’t want, so that their names are associated with a scam, so they are more likely to do the necessary work before associating themselves with any project, “he said.

Binance CEO Changpeng Zhao told WSJ that in his company there is a whole team of employees whose work is completely related to the selection of projects for IEO. Zhao clarified that legal responsibility falls largely on the issuers of tokens, but the exchange helps them limit the supply in jurisdictions where this should not be done. Also Binance requires, so that projects provided legal advice confirming that their tokens are not securities.

WSJ: IEO on Binance costs startups 2-5% of the amount raised

Co-founder of the Harmony project, whose IEO was recently held on the Binance Launchpad platform, Nick White said that they had been in talks with representatives of the exchange for a whole month, answering “a bunch of questions” regarding including their teams and business models.

In May, the BitMEX exchange published its own research in which it questioned the long-term prospects of IEO, acknowledging wherein their advantages over ICO.

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