Korea M&A Center announced the launch of the ‘ESC LOCK’ (www.esc-lock.com) service, an ICO investment model equipped with an investor protection device. ESC LOCK combines the escrow system used in financial markets such as e-commerce, together with ICOs, to create a model that ‘locks’ the investments of investors and the cryptocurrency issued by ICO companies.
ESC LOCK only deposits the investment to the ICO company if certain required conditions are met. If these conditions are not met in full, the investment is returned to the investor, minimizing investor loss. Conditions for deposit of the investment to the ICO company are 1. being listed on an exchange 6 months after the ICO, 2. maintaining a fixed price 1 month after listing, 3. and achieving over 50% of the escrow amount through a standard ICO. The exchanges where the listings are recognized are limited to the top 30 Korean and foreign exchanges established by the ESC LOCK review committee. In addition to the basic conditions listed above, investors can set further options such as development and business progress to further secure their investments.
As Ethereum (ETH) is predominantly used for ICO investments, the Korea M&A Center will immediately convert the invested ETH into cash and deposit it into a bank escrow account to eliminate the risks and damages of price fluctuation. This structure allows investors to receive a return on the amount of ETH invested even if the ICO fails or the price drops after listing.”
Korea M&A added that its new model makes it “possible to stabilize prices by distributing the amount of cryptocurrency open to the market after being listed, and to immediately raise additional funds when successful development or business is completed.”