Lition Gets Some Kosher Advice From BitMax CEO: Set Aside $1 Million For ‘Market Making’
Lition Gets Some Advice From BitMax CEO – Set Aside $1 Million!
On March 21st, a new project called Lition had brought in $4.9 Million during their fundraising round, supporting the work that they are doing on a public-private blockchain that offers deletable data features. The platform was rumored to be on its way to being listed with BitMax, which is based in Singapore as an exchange that makes most of its money through transaction mining.
Unfortunately, BitMax posted to Twitter to let the public know that this would not be the case, though they wished the project well.
It has brought to our attention that many community members are speculating primary listing of Lition on https://t.co/ZgbxdXzvT8. While Lition in the spotlight, we are not currently talking to the team regarding the listing. Wish all the best to the Lition project.
— BitMax Official (@BitMax_Official) March 22, 2019
Allegedly, the rumors had some truth, since Lition was supposedly in the middle of negotiations, even to the point of BitMax originally agreeing to list it. An apparent ICO consultant says that the contract was even sent over to be signed, allowing the listing to be technically considered to be “free.” However, the fee is believed to be $1 million for a money marketing budget on the project, which only has a $5 million cap. All of these interactions are believed to have taken place on the day of the sale.
Lition was not impressed with the offer, and there was no agreement signed. That is when BitMax went public with their lack of discussions. Soon after, BitMax CEO George Cao said that the $1 million request was authentic, but expressed that there was not any bad relationship between the two entities.
TrustNodes published screenshots of the explanation that Cao offered.
There is a new business model that projects raise under $10 million in an effort to qualify for the crowdfunding exceptions that keep them outside of securities regulations. At that point, getting listed on an exchange is nearly instant, and the investors have the opportunity to buy and sell without the concern of the Securities and Exchange Commission (SEC).
These projects are referred to as Initial Exchange Offerings (IEOs), which have a limited supply in their ICO. This concept appears to give them instant gains on the token. With the case of BitMax, the exchange is unregulated, and it is unclear if their idea of “market making” is basically the same as “price manipulation,” which they call “supporting the price.”