- Minimization of investment risks by holding investments in escrow and making deposits when required conditions are met
SEOUL, South Korea, April 26, 2018 /PRNewswire/ -- A patented financial model has been launched to allow for investments into ICOs (Initial Coin Offering) without worrying about scams.
On the 23rd, the Korea M&A Center announced the launch of the 'ESC LOCK' (www.esc-lock.com) service, an ICO investment model equipped with an investor protection device. ESC LOCK combines the escrow system used in financial markets such as e-commerce, together with ICOs, to create a model that 'locks' the investments of investors and the cryptocurrency issued by ICO companies.
Recently in Vietnam, the largest ICO scam in history was recorded as some 32,000 investors lost a total of over $660 million USD for the Modern Tech exit scam. In related news, three of the co-founders of the Centra ICO, a well-known project with celebrity backing, have been charged with fraud. According to market research organization Token Data, among the 902 ICOs conducted last year, 276 or over 30%, failed to reach commercialization after achieving their investment goals. ESC LOCK was created to address these issues in the ICO market where investors lack protection.
ESC LOCK only deposits the investment to the ICO company if certain required conditions are met. If these conditions are not met in full, the investment is returned to the investor, minimizing investor loss. Conditions for deposit of the investment to the ICO company are 1. being listed on an exchange 6 months after the ICO, 2. maintaining a fixed price 1 month after listing, 3. and achieving over 50% of the escrow amount through a standard ICO. The exchanges where the listings are recognized are limited to the top 30 Korean and foreign exchanges established by the ESC LOCK review committee. In addition to the basic conditions listed above, investors can set further options such as development and business progress to further secure their investments.
As Ethereum (ETH) is predominantly used for ICO investments, the Korea M&A Center will immediately convert the invested ETH into cash and deposit it into a bank escrow account to eliminate the risks and damages of price fluctuation. This structure allows investors to receive a return on the amount of ETH invested even if the ICO fails or the price drops after listing.
In addition, the opportunity to participate in ESC LOCK is only granted to select ICO companies that have completed a strict pre-verification process by the ESC LOCK review committee, so investors are provided with a safe investment opportunity and do not have to worry about choosing a proper ICO to invest in.
From the perspective of ICO companies, ESC LOCK has a number of benefits. First, with the secure investor protection devices in place, it is easier to raise investment funds because investors can rely on the ICO company. In addition, it is also possible to stabilize prices by distributing the amount of cryptocurrency open to the market after being listed, and to immediately raise additional funds when successful development or business is completed.
The structural stability of ESC LOCK makes it highly attractive to companies and funds that have previously been hesitant about participating in the ICO market. The investment base is expected to expand to the general public, those with no ICO investment experience, by providing a foundation for the entire market where scam companies cannot enter.
ESC LOCK is not only able to fundamentally prevent scam ICOs that have been spreading recently, but is also structured so that the immediately escrowed full investment amounts are refunded if a problem occurs.
The Korean M&A center will hold a public briefing session on May 10th at the Dongjak Art Hall near Seoul Station in Seoul, Korea to officially launch ESC LOCK as the world's first ICO scam prevention model both domestically and globally. At this public briefing session, which will be held with the "29th Win-Win Matching Conference", the first ICO companies to adopt the ESC LOCK service will also present their business models to the audience.
Sean Ryu, the CEO of the Korea M&A Center stated, "As many investors, both domestically and globally, have become victims of failed ICOs, unrealistic White Papers, and ICO scams, the need for a service that provides advantages to ICO companies while also protecting investors has never been more important. ESC LOCK is a patented financial model (Application No. 10 -2018-0045475) that does this. In the recently subdued ICO market, ESC LOCK will become a major power in the further development of the blockchain ecosystem and a safe ICO investment culture.
The Korea M&A Center is a specialized M&A and investment platform dedicated to create a sound M&A ecosystem and virtuous investment structure. The Korea M&A Center has introduced 'Win-Win Crowd Funding', a protection system for start-up investors that is a financial patent model integrating investment and M&A. Since 2015 has held over 30 Win-Win Matching Conferences and IR seminars. Although it has succeeded in Win-Win Crowdfunding, the Korea M&AS Center has also created a stir among crowdfunding investors by returning the investment capital and interest of a recently closed startup to investors on behalf of the start-up.
SOURCE Korea M&A Center