Xiaomi Denies Involvement With ICO of a Token Based on Its Stock

Chinese smartphone maker Xiaomi denies any knowledge or involvement with a new initial coin offering that sells tokens pegged to Xiaomi’s stock price in the Hong Kong Stock Exchange.

As the smartphone maker is scheduled to go public in Hong Kong, a Cyprus-based company called Blackmoon announced the initial coin offering for the BMxXMI token. The value of the token is pegged to the stock price of Xiaomi. This means that whatever the stock price of Xiaomi is, the BMxXMI token will reflect the same.

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For Blackmoon, this scheme allows token investors to get exposed to Xiaomi’s stock performance without directly owning the stock. Participants can buy the tokens by paying in bitcoin, ether, or litecoin. Blackmoon declined to reveal how many tokens have been sold already, but said there are already buyers in Europe.

However, Xiaomi claims it did not approve and will not endorse any such initial coin offering.

Funds raised from the ICO will be used to purchase Xiaomi stocks on behalf of the token investors. Holders of the coin can redeem their investments in cryptocurrency. Blackmoon said it is working out a way to pay investors in cash. More importantly, a lock-in period of 93 days will be in effect after Xiaomi’s initial public offering (IPO). This means token investors will only be able to cash out 3 months after the IPO date.

Xiaomi is a consumer electronics company based in China that manufactures smartphones, tablets, and other electronic gadgets. Its IPO aims to raise around $6.1 billion, making it the 8th largest offering in the Hong Kong Stock Exchange since its founding in 1986. Xiaomi recently unveils its official online store in Southeast Asia, including one in the Philippines via the online marketplace Lazada.

Sources: SCMP, Coindesk