Raise up to RM100mil via IEO Platform in Malaysia


What is an Initial Exchange Offering (IEO)?

An Initial Exchange Offering (IEO) is a fundraising method in the cryptocurrency industry that involves the sale of tokens or coins directly on a cryptocurrency exchange. It is a variation of the Initial Coin Offering (ICO) model but with the key difference that the token sale is conducted on a specific exchange platform rather than the project's website.

It's worth noting that the popularity of IEOs has declined in recent years, with the rise of alternative fundraising methods such as Initial DEX Offerings (IDOs) and Security Token Offerings (STOs). These newer models offer different features and cater to specific needs in the evolving cryptocurrency landscape.

How an IEO Works?

Here's how an IEO typically works:

  1. Selection of Exchange: A cryptocurrency project partners with a cryptocurrency exchange platform to conduct their token sale. The exchange platform acts as a facilitator and conducts due diligence on the project before agreeing to host the IEO.

  2. Token Sale Announcement: Once the exchange and project reach an agreement, the details of the IEO are announced, including the date, time, and price of the token sale. The project may also provide information about the token's utility, roadmap, and other relevant details.

  3. Token Purchases: Investors interested in participating in the IEO must create an account on the exchange platform and complete any necessary Know Your Customer (KYC) requirements. During the designated sale period, investors can buy the project's tokens directly from the exchange platform using a specified cryptocurrency (such as Bitcoin or Ethereum) or sometimes even with fiat currency.

  4. Exchange Support: The exchange platform handles the token sale process, including the collection of funds from investors and the distribution of tokens. The exchange typically charges a fee or takes a percentage of the funds raised as compensation for hosting the IEO.

  5. Listing and Trading: Once the IEO is successfully completed, the project's tokens are listed on the exchange platform, making them available for trading. This provides immediate liquidity to the tokens, allowing investors to buy, sell, or trade them on the exchange.

Malaysia Registered IEO Operators

The Securities Commission Malaysia (SC) has registered two Initial Exchange Offering (IEO) operators, Kapital DX Sdn Bhd and Pitch Platforms Sdn Bhd, to promote responsible innovation in the digital assets space.

The registered IEO operators will provide an alternative avenue for eligible companies to raise funds via the issuance of digital tokens in Malaysia. An issuer may raise funds up to RM100 million from retail, sophisticated, as well as angel investors, subject to the investment limits provided in the SC’s Guidelines on Digital Assets.

These new operators will be required to carry out the necessary assessments, among others, to verify the issuer’s digital value proposition, review the issuer’s proposal and disclosures in its Whitepaper, and undertake a comprehensive due diligence on the issuer and its token offering, prior to hosting the issuer’s digital token on their platform.

Related Sources of Capital