Swissquote, the leading Swiss digital bank, has announced that it will now allow its clients to participate in Initial Coin Offerings (ICOs). Clients will now onwards be able to buy tokens issued within an ICO via the Swissquote platform.
The ICO is a means of crowdfunding, similar to the IPO (initial public offering), except it requires a blockchain and the sale of cryptocurrencies. It is usually used by startups and businesses to raise funds for new projects.
In a press release dated October 22, Swissquote stated that the first ICO available on its platform is from EPFL spin-off LakeDiamond. LakeDiamond produces high-grade diamonds in laboratories with specialized reactors, for demanding industrial applications such as watch movements, lasers, and transistors.
Pascal Gallo, CEO of LakeDiamond said,
“LakeDiamond has developed and continues to develop its cutting-edge technology combining lab-grown ultra-pure diamonds and high-end industrial applications. With its ICO, LakeDiamond is seeking to accelerate its growth and is delighted to be the first company using the new ICO services offered by Swissquote.”
Through its ICO, LakeDiamond is looking to sell machine production minutes in the form of tokens. A virtual token corresponds to actual machine time. The tokens are issued following the technical standard used for smart contracts on the Ethereum platform.
LakeDiamond is currently issuing tokens worth 60.5 million Swiss francs in total. The company intends to utilize the money raised within the ICO to increase its production capacities by buying 50 new reactors.
Further on the development, Swissquote CEO Marc Burki commented,
“True to our philosophy to democratize finance by offering services that are simple and accessible to everyone, we are now offering our clients the opportunity to help grow start-ups. Combining crowdfunding with the blockchain creates a new form of fundraising. Thanks to contributions starting at 33 Swiss francs, clients can participate without being required to invest large sums into venture capital or private equity funds.”
The minimum amount of purchase currently consists of 60 LakeDiamond tokens (LKD) which is equivalent to 33 Swiss francs. The company, however, points out the possibility of fluctuating conversion rates following the ICO. The new rates would be based on demand for tokens and diamonds as well as the performance of the diamond reactors operated by LakeDiamond.
As per the norm until now, a proper understanding of blockchain technology was essential for investors looking to participate in an ICO. However, with the new Swissquote service, this is no longer required. Clients can purchase tokens issued by a company directly against Swiss francs, using their trading account. Swissquote takes care of the other services related to the tokens, such as execution and custody.