The Korean M&A hub said Thursday it is launching a proprietary financial service, ESC Lock, designed to protect investors from the colossal losses they could suffer in initial coin offerings.
Not long ago, the largest ICO fraud was recorded in Vietnam. More than 32,000 investors lost a total of more than $660 million due to the Modern Tech ICO scam. According to research organization Token Data, of the 902 ICOs conducted last year, 276, or more than 30%, failed to reach the commercialization stage after raising the required amount. Representatives of the center say that ESC Lock was specifically designed to solve these problems in the ICO market, where investors have no guarantees.
With ESC Lock, you can invest in a company conducting an ICO, setting certain conditions for it. If these conditions are not met in full, the funds are automatically returned to the investor, minimizing his losses.
Since Ethereum is most often used to participate in ICOs, the M&A Center will immediately convert the Ethereum into fiat and deposit them into a deposit account at the bank. Such a scheme will allow investors to receive a refund in the amount of invested digital funds, even if the ICO fails or its price falls after the placement of coins, the center said in a statement.
In the future, ESC Lock may also become useful for ICOs. The service will be able to stabilize prices by distributing cryptocurrency funds on the open market after they are listed. Such a project can immediately attract additional funds upon the successful start or completion of a new development.
“With many investors, both in Korea and around the world, having fallen victim to failed ICOs, fraudulent ICOs, and unrealistic white papers, the market is increasingly in need of a service that can provide benefits to ICO companies while protecting investors,” said Sean Ryu, CEO of the Korean center.
According to http://www.koreaherald.com
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