Canadian oil financing firm Oleum Capital Inc plans to raise $200 million in mid-January through what it calls the world’s first offering of both shares and cryptocurrency tokens, a senior company executive told Reuters.
The Calgary, Alberta-based company, which helps relatively small firms that may have trouble raising capital on their own, intends to list on the Dutch Caribbean Securities Exchange, co-founder and Chief Innovation Officer Dave Bradley said in an interview on Friday.
The firm has been accepted by the exchange pending the meeting of listing and compliance requirements, he said.
Oleum’s traditional shares will have the same value as its digital tokens, initially priced at $1, Bradley said. They will be interchangeable and offer dividends.
The issuance of virtual tokens to investors is usually used by startups founded on cryptocurrency technologies such as blockchain, allowing them to quickly raise funds and skip the regulatory hoops of mainstream markets.
These so-called initial coin offerings (ICO) have become more popular in the past year, even as many regulators have called them risky and highly speculative.
Bradley said Oleum intends to comply with all relevant rules and wanted its offering to be sanctioned by regulators.
“The willingness that the Dutch Caribbean exchange has shown to work with an ICO has been one of the main drivers” in choosing it, he said. “They really see the profound changes the ICO funding model is going to bring.”
A Dutch Caribbean exchange representative acknowledged the listing, but did not comment further.
Bradley said Oleum had explored listing domestically, but found too much “red tape” because he said Canadian regulators have not ruled specifically on the largely uncharted territory of ICOs.
Low commodity prices have made it hard for energy companies in Canada’s oil heartland of Alberta to raise capital, and they are seeking new funding sources. “We’re filling a gap in the market that banks and private equity are not funding right now,” Bradley said. “ICO financing is just going crazy this year.”
Digital coin sales in 2017 soared to about $3.6 billion by mid-November, a quantum leap from just over $100 million in the whole of 2016, according to Autonomous NEXT, which tracks technology in the financial services industry.
(Reporting by Ethan Lou; Editing by Richard Chang)