Canadian oil financing firm Oleum Capital Inc is about to get its biggest cash infusion yet, but this time part of the financing round will come from an initial coin offering (ICO) instead of only regular investors.
Taking advantage of a rush towards investments based around selling crypto tokens, the company plans to hold a hybrid shares/ICO fundraising event, which will take place in mid-January, a senior company executive told Reuters.
Alberta-based firm expects to raise $200 million from its ICO/shares crowdsale through a process by which it sells tokens and traditional stocks at the same value, initially priced at $1.
Although it’s far from certain yet that crypto investors will line up to throw their money into a company that is focused on financing small energy firms, but ICOs, in general, have spread in 2017, raising more than $3.6 billion for dozens of startups.
Canada cashes in on cryptocurrency frenzy
Canada is emerging as a hub for blockchain-based investments amid a virtuous circle of expertise and business, thanks in part to an ecosystem that have relevant capabilities to support start-ups and their innovations. In addition, several companies tied to the crypto sector are set to list on the country’s stock exchanges in the next year.
Nevertheless, Oleum opted to list on the Dutch Caribbean Securities Exchange as Canadas’s securities regulators have recently voiced concerns over investor frenzy toward ICOs.
The CSA stated that earlier this year this new fundraising phenomenon should be categorised as securities, at least in some cases. This implies that certain ICOs/ITOs would now need to follow Canadian securities laws, which requires assessing the economic realities of the offering to protect participating investors.
Oleum’s co-founder and Chief Innovation Officer Dave Bradley noted that his firm is barreling full steam ahead into the world of ICO investing as the sector is currently facing challenges to access the traditional financing vehicles. Because of low oil prices, and extended uncertainty even after recent rebound, most capitalists remain wary of them, which make their very line of work suddenly looks threatened.
Bradley added: “The willingness that the Dutch Caribbean exchange has shown to work with an ICO has been one of the main drivers. They really see the profound changes the ICO funding model is going to bring. We’re filling a gap in the market that banks and private equity are not funding right now. ICO financing is just going crazy this year.”