There is a growing criticism of the IEO (Initial Exchange Offering), a type of financing method using tokens. Unlike ICO, IEO is a token that cannot be bought or sold only by cryptocurrency exchange users. Large cryptocurrency exchanges such as Binance and Huobi are launching their own IEO platforms one after another, and the IEO market is also showing strong performance. According to Bloomberg News, it has raised $180 million in 23 IEOs so far. Most of these have been done since February.
On the other hand, the ICO market is still cold. ICO in the first quarter decreased in both the amount of procurement and the number of projects compared to the previous quarter. However, according to Bloomberg News, some experts point out that IEOs have as much problems as ICOs. It is unclear whether it will be possible to protect investors from fraudulent behavior, depending on the exchange’s listing standards. Moreover, it is not known whether the regulation will act more favorably than the ICO.
One expert pointed out the contradictions that exchanges intervene as intermediaries, criticizing that it is ironic that the cryptocurrency industry directly denies the spirit of decentralization. In fact, he pointed out that some cryptocurrency exchanges use IEO as an opportunity to force their use of their tokens.