IEO – Initial Exchange Offering. An IEO is an Initial Exchange Offering – the next extension from the very troubled and dubious ICO era in the world of cryptocurrencies. The ICO certainly did not last and is going away, so enter the IEO.
The IEO changes the game in that the exchange or exchanges involved are strongly compensated and motivated to help with the sale. In a sense the counterpart risk and risk overall shifts from relying on a small startup team (scams in many, many cases) to relying on the exchange itself. Binance as an example is heavily involved with running IEOs.
What is still not clear is how the IEOs fit in legally and within the regulatory structure. Binance recently announced the need to completely change its operations with U.S. customers. The IEO does not grant any claim on cash flows or actual ownership to the buyer. Is this legal? Is it a security? Lots of issues to be ironed out with this growing movement that appears to be a transition point. What does someone own if they buy an IEO? Anything?
Forbes.com offers some insight on IEOs and where the market stands in 2019.
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