In brief

  • Coincheck will join forces with Hashpalette to launch an initial exchange offering.
  • Hashpalette is working with Japanese media companies to develop an ecosystem for creating and exchanging unique NFT assets.
  • Coincheck has been the victim of two high-profile hacks since 2018.

DeFi may be all the rage, but Japanese crypto exchange Coincheck is ready to get in on the initial exchange offering action.

Coincheck announced on Tuesday plans for an upcoming initial exchange offering (IEO) to distribute Hashpalette’s PLT token. It claims this will be the first IEO in Japan.

Hashpalette will use non-fungible tokens (NFT) on Ethereum to promote Japanese cultural content like manga, sports, and music. PLT tokens, meanwhile, will facilitate payments for exchanged goods on a secondary market on the Palette blockchain platform. 

The announcement shows that while DeFi may be capturing the biggest headlines, IEOs and NFTs are also growing parts of the crypto ecosystem.

Initial exchange offerings (IEO) function similarly to initial coin offerings (ICOs), which became popular during the 2017 crypto bull market; they allow buyers to fund projects in exchange for coins or tokens expected to grow in value as the project matures. 

However, whereas ICOs sold tokens to anyone with an Ethereum wallet, IEOs are theoretically subject to closer scrutiny. They are only available through centralized exchanges after the exchange reviews and approves them as legitimate projects with reasonable prospects to deliver on advertised goals.

Hashpalette was founded in March 2020. It’s the result of a joint venture between software development company Link-U and blockchain innovation company HashPort, both based in Japan. While an official launch date for the Hashpalette IEO has not been set, Coincheck’s announcement of the collaboration noted that the exchange has been considering commercial preparation of such offerings since August 2019.

Coincheck is one of Japan’s most popular cryptocurrency exchanges, claiming more than 2.8 million users in June 2020. It was the victim of one of the largest ever crypto hacks in 2018, when NEM tokens valued at more than $500 million were swiped from the exchange. A second May 2020 hack saw no crypto losses, but attackers made off with the personal details of approximately 200 exchange customers.