As initial coin offerings (ICOs) start to come under regulatory scrutiny in the U.S., one Australian venture capital firm is experimenting with a new way to convert cryptocurrency into regulated corporate shares.
Following a decision to offer a 300,000 Australian dollar ($239,000) convertible bitcoin loan to blockchain payments startup DigitalX, investment firm Blockchain Global Limited has revealed exclusively to CoinDesk that it has completed its due diligence and will close the entire AU$4.35 million investment in bitcoin.
However, what distinguishes the deal from past startup investments using bitcoin is that, following a series of unusual events, DigitalX is now a publicly listed company that trades under the ticker symbol DCC on the Australian Securities Exchange (ASX).
As such, Blockchain Global CEO Sam Lee believes the completion of the deal will mark a milestone in cryptocurrency history.
The decision to invest in DigitalX further comes after a due diligence period that initiated in June with a disclosure on the ASX site detailing the terms of the loan. Under the terms, Blockchain Global was given the option to covert the AU$300,000 into shares or receive repayment plus 12 percent interest one year after the drawdown of the loan.
Now that DigitalX has passed the due diligence process, the investor firm has opted to convert the entire bitcoin investment into shares, and has asked that the interest on the initial loan be paid in bitcoin.