Launching the cryptocurrency ACE Exchange, Ace Digital Innovations Co Ltd (王牌數位創新) on Wednesday said it has contracts with seven companies to raise funds through initial coin offerings (ICOs).
To raise money through an ICO, a company creates virtual tokens based on blockchain technology and sells them to investors or offers “utility tokens” that allow the holder to exchange tokens for the company’s products or services.
The ICOs are to be less regulated by the Financial Supervisory Commission (FSC), which has said that trade in utility tokens is similar to the trade of normal goods.
The exchange would not only allow cryptocurrency trading, it would serve as an incubator, helping companies interested in blockchain applications and ICOs, general manager David Pan (潘奕彰) told a news conference in Taipei.
As ICOs are new, many companies do not know how to design such coins, outline their ideas on token use or implement know-your-customer practices, Pan said.
“We suggest the issuers to set a token’s price similar to the price of their products, as token-holders can exchange tokens for goods,” Pan said.
Ace has helped three companies conduct ICOs, raising a total of about NT$30 million (US$972,731), with the third ICO completed on Monday, he said.
It has inked contracts with seven firms, ranging from one in the pet care industry to cosmetic surgery clinics and gaming and electronic ticket system providers, he added.
While ICOs have come under criticism around the world due to many virtual tokens becominge garbage after their issuers failed, Ace would only work with companies that have a solid business performance, he said.
“Not every company can do an ICO. We have rejected 90 percent of firms interested in our services because they do not have stable revenue,” Pan said.
Another 5 percent were rejected when the firms, during the consulting process, found that they could not integrate blockchain technology into their business, he said.
“We are very careful with our partners and will not allow the virtual tokens issued with our help to become trash,” Pan said.
However, Ace has no plans to help firms conduct securities token offerings this year, as the FSC has not finalized its regulations covering such trades, he said.
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