Background and Issues to Address
EXMO wishes to address a gap in the cryptocurrency market: to generate a platform where margin loans can be provided, and it seeks to raise the requisite funds via an ICO offering.
In an EXMO review focused on their whitepaper and website, the following factors are of note:
EXMO’s team appears to be fairly strong, comprising of globally (with developers from Spain, Russia, India and Thailand; and finance professionals from the UK, USA, Lithuania and Singapore) and technically trained individuals.
However, no further information is provided in the whitepaper, other than the name and position of each team member.
The aim of the token is to address a gap in the market for traders with smaller amounts of capital via margin loans. The aim of the ICO is to provide additional investment capital to EXMO by issuing tokens to then cover trader demands for margin loans, as well as to enable overall platform development.
Token holders are promised 50% of the revenue derived from the margin loans distributed among them, in the form of dividends on a monthly basis (pro rata on profits against that month).
It is intended by the EXMO team that upon reaching $250m-$300m in raised investment, EXMO will then aim towards acquiring its competitors either through a merger or acquisition, with a view to increase capitalisation and scalability in new markets. The coin is then to be listed on several exchanges simultaneously, for the purposes of increasing the profit from margin lending.
The whitepaper focuses on the financial side of the project ie.) the profit-making side. It does not deeply delve into the technical aspects of the project ie.) whether the blockchain used is public or private etc. In any event, EXMO prides itself on not reinventing the wheel, and instead, working towards developing an already existing business model. In that respect, seasoned investors would have no need to have an in-depth understanding of the blockchain technology utilised for the performance of the project.
EXMO’s whitepaper refers to the reputation that it has gained in the market. At the time of writing the company has been in the market for 4 years, with over 900,000 users daily, and is often covered by relevant media platforms such as Coin Idol, Crypto Ninjas, Blockchain News, CryptoCoins News, Log, Coin Telegraph etc. In addition, trading volumes have increased 9-fold from 2014 to 2017.
- Legal Aspects
Noted that there are no legal specialists in the team, however EXMO has created a European Asset Management Fund, which meets the requirements of EU-specific directives on cryptocurrencies. The trust fund itself is established in the form of a Swedish trust company, which has its own identification codes for the purposes of counteracting money laundering and the financing of terrorism.
As usual, cryptocurrency trading will always be highly risky insofar as it is uninsured, and therefore capital may be at significant risk. Whilst it appears from a cursory EXMO review that the exchange is fairly legitimate, I would suggest that a cause for slight concern might be the fact that the project is within a trust wrapper. Trust funds tend to protect the identity of individuals involved in an entity, which in itself goes against the principle of decentralisation which centres around blockchain technology. In any event, it is suspected that the project is developed on a permissioned chain, which in itself is a centralised design.