Crypto exchange Bitfinex announced via a blog post that Kim Dotcom’s $8 million initial exchange offering (IEO) had been called off due to regulatory risks that could endanger issuers and investors alike.
Bitfinex explained that the decision was mutually agreed upon by both parties prior to the announcement. As emphasized in the blog post, since the listing of Kimcoin on the exchange’s token sale platform, a lot has changed in the regulatory environment. If the IEO would be conducted as planned, Bitfinex made it clear that all involved would face regulatory scrutiny and difficulties.
With the risks becoming crystal clear, Bitfinex decided to delay the IEO until the situation becomes favorable for all participants. Furthermore, the crypto exchange stressed that its priority at the moment is to secure the best interest of its community.
As reported by Coinmod, the IEO targets to raise funds for Dotcom’s K.im project, a Bitcoin content sharing platform. Dotcom announced that 10% of the platform’s profit would be used to support Julian Assange, the founder of WikiLeaks who is currently facing a legal battle against the US government.
In the United States, the ever-changing regulatory standards that govern fundraising models put businesses in a vulnerable position. Kik, for instance, is currently facing court charges due to its 2017 initial coin offering. As emphasized by US regulators, the firm failed to register its ICO, and thus was deemed unlawful.