Chinese technology giant Xiaomi is going public in Hong Kong through an IPO that is scheduled for July 9 on the Hong Kong Stock Exchange but a Cyprus-based company called Blackmoon wants to involve cryptocurrency.
Blackmoon announced that it was offering a digital currency option to people who wish to invest in Xiaomi?s IPO by using itself as a bridge between the world of financial assets and the cryptocurrency realm. The Cyprus-based firm aimed to achieve this by selling digital tokens in exchange for Xiaomi shares and the deal would be based on a dollar-to-dollar deal. Customers have been provided with the option of paying for the token using Bitcoin (BTC), Ethereum (ETH), or Litecoin (LTC).
?We had a poll on social media ? and many people said that they are interested in participating in the IPO through tokens,? stated Blackmoon?s CEO, Oleg Seydak.
The digital token will be pegged on the price of Xiaomi?s stock on the Hong Kong Stock Exchange. This means that the gains or losses of the token will be directly proportional to the price performance of the company?s stock. Blackmoon had planned to convert the funds raised through its ICO into fiat currency which it would then transfer the funds to its brokers to purchase Xiaomi?s stock during the IPO.
Xiaomi warns that it has not authorized such a token
Blackmoon?s plan involved a 93-day lock-up period, after which the buyers of its token would then be allowed to sell the purchased digital tokens through a broker. The Cyprus-based firm has however not disclosed the names or details of the brokers that will be involved. This plus the fact that Xiaomi is not on board with the idea raises red flags about the legitimacy of the plan.
Unfortunately, it seems that Xiaomi did not like the idea. The company announced that it did not authorize an initial coin offering (ICO) selling digital tokens that are pegged on its stock price. Xiaomi plans to raise $4.7 billion through the IPO which is already shaping up to be one of the most anticipated IPOs in Hong Kong. Xiaomi has previously launched IPOs in Shanghai and the U.S but they have fallen short of expectations.