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World Chess, the company responsible for broadcasting the World Chess Championships, has announced a “hybrid IPO”. First, a Digital Securities Offering (DSO) will take place in 2020, with a subsequent IPO via London’s Alternative Investment Market (AIM).
World Chess Using Blockchain for a Tokenized Offering Explained
World Chess is a media outlet and web-based gaming company. Each year, they broadcast the World Chess Championships. Now, the company is turning to digital securities — also referred to as security tokens — to raise capital.
Here’s how it will work: a digital securities offering will take place sometime in the year 2020. During the offering, digital securities will be made available to accredited investors located in the United States and European Union. The digital securities will represent ownership of World Chess shares, and can either be transitioned to shares during a subsequent IPO or traded to other accredited investors.
Digital securities offerings leverage the benefits of blockchain technology to make assets more liquid, eliminate costly middlemen, and facilitate greater asset management than available through traditional structures. World Chess will turn to Securitize, a technology provider for the tokenization of securities and SEC-registered transfer agent. The San Francisco-based firm has successfully tokenized more than ten assets. In this particular case, Securitize will oversee the token offering and vet investors to verify their eligibility.
According to World Chess CEO Ilya Merenzon, the deal represents “a pioneering financial innovation — one, I believe, many companies will use to raise funds in the future”.