Malta-based company launches 'world's first' Initial Convertible Coin Offering platform

The world’s first ever Initial Convertible Coin Offering (ICCO) platform was launched in Malta today promising to be a historic landmark and “bridge the gap between traditional financial services and crupto-currencies”. 

Initial Coin Offerings (ICO) is a method through which start-ups can source capital by selling a percentage of crypto-currency to investors in the form of tokens in exchange for legal tender.

In this case, the “tokenized convertible warrant” will be regulated by a prospectus approved by the Malta Financial Services Authority – the country’s regulator – and is subject to “stringent EU rules” and its issuance will give investors the right to convert the tokens into shares of Palladium, three years after the issue date.

“We expect this project, which will create more than 100 job opportunities, to be a historic landmark and to bridge the gap between traditional financial services and crypto-currencies,” Palladium founder and chairman Paolo Catalfamo said at the press conference marking the ICCO’s launch.

Catalfamo’s company Investar, which owns 85% of the shares in Palladium, also has a controlling stake in Global Capital plc., a Maltese financial services firm.

The other shareholders in Palladium are Unikrn Inc., Las Vegas-based e-sports betting company founded by Rahul Sood, a former CEO of Microsoft Ventures. 

Speaking at the launch, Prime Minister Joseph Muscat said that Blockchain technology would create a new economic niche for Malta, which would generate more jobs and wealth. 

The government and all other stakeholders in the industry are paving the way for Malta to be a Blockchain island, the Prime Minister said.

“The three pieces of Blockchain legislation which were passed in Parliament recently form the start of a new exciting journey putting Malta in the frontline," he said.

Joseph Muscat said that such blockchain technology is set to form a new economic niche in Malta

Catalfamo praised the government’s approach to regulating the sector, adding that the ICCO was one of the most unique investment opportunities in the blockchain world.

“Institutional investors recognize the scale of the opportunity, but the lack of regulation has kept them watching from the sidelines,” he said. “Palladium’s solution will change this. Cutting-edge blockchain technology will allow customers to use regulation-compliant, multi-asset accounts to manage fiat and crypto currencies.”

Parliamentary secretary Silvio Schembri highlighted that Malta now had a legal framework for Blockchain, which showed it was embracing and anticipating new technology.

He said the government would, in the coming weeks be launching a "blockchain lab", aimed at training civil servants in this technology.

Schembri also said the University of Malta would be starting new degree courses on this new technology this year in order to train those working in the sector.

Proceeds to fund acquisition of European bank

Palladium’s fundraising target is €150 million, with the pre-sale of tokens starting today. The offering period for subscription of the tokenized securities will run from 25 July to 30 September.

The company said that proceeds will be used to “support the three core blocks of Palladium’s solution: 50% will go towards the acquisition of a controlling interest in a European bank; 35% into the formation of a regulated crypto-exchange and the development of a clearing and settlement blockchain platform; and 15% into strategic investments in financial services and blockchain companies”.

The Palladium crypto-exchange will be the result of a partnership between Palladium, Unikrn and Bittrex, a US-based digital trading platform and blockchain company.

“We’re committed to advancing blockchain technology and identifying projects that highlight its potential benefits,” Bitrex CEO Bill Shihara said.

“Our partnership will launch a new trading platform powered by Bittrex technology, and its customers will have access to the large selection of innovative utility tokens listed on Bittrex, which we chose using our industry-leading token review process.”

Shihara said the project would help further increase adoption of blockchain technology while expanding Bittrex’s business globally.

On his part, Sood said that there was nothing like the platform in the history of banking or crypto-currency.

“Palladium has found a way to solve some of crypto-currency’s biggest drawbacks with a single solution within existing regulations.”

The Palladium board of directors is made up of Catalfamo and Sood, as well as Gregory McGowan, Joseph Del Raso and Brian Jamieson.