2 Years Ago

Coss and ARAX have announced they are going to merge, which is being heralded by some as the first merger of two firms that had issued utility tokens by carrying out Initial Coin Offerings (ICOs).

The combined business will be able to enjoy economies of scale bringing together two management teams and create a much larger utility token for their users.

Coss, which stands for Crypto One Stop Solution, is a Digital Asset exchange based in Singapore, and ARAX is a Digital Asset wallet which supports seven different Blockchains and seventeen Digital Assets and has over 250,000 users.

As the price and the liquidity of Bitcoin and Ethereum (Crypto) have improved, it is now possible for firms that have carried out ICOs to start selling some of their Crypto assets, which could potentially have two consequences. Some of these firms will be sitting on Crypto assets that have become much more valuable in the last few months and are, in effect, “digital Cash shells “, which may well encourage merger and acquisition (M&A) activity.

On the other hand, as these firms now potentially have greater asset value, we could see more litigation. The potential for litigation was laid out recently by US law firm Polsinelli LLP, in their paper entitled “Cryptocurrency Class Action Lawsuits: A New Frontier”

As we start to see Security Token Offerings (STOs), which will potentially be backed by real assets, such as publicly quoted equities and bonds, it will not be too long before we see STOs also being caught up in M&A. Then the lawyers and regulators will need to work out how to equitably combine traditional assets with this new asset class…

Mergers And Acquisitions