CROWD for Angels has unveiled a £50m bond investment opportunity that will pay investors interest and tokens in the form of an initial coin offering (ICO).
The peer-to-peer platform is looking to raise up to £50m for a Liquid Crypto Bond that will pay investors three per cent over five years. Investors will also receive cryptocurrency tokens through an ICO that can be traded on external exchanges or used to invest in further projects on the Crowd for Angels website.
The minimum investment in the bond is £5,000 and it can be held in an Innovative Finance ISA.
Each initial £1 bond raised will have 100 tokens attached, of which investors will receive up to 99 tokens, with Crowd for Angels retaining the balance.
Crowd for Angels will use money raised to invest in other bonds on the platform.
Read more: Blockchain special feature
“The tokens are being issued to investors as a reward for investing in the Liquid Crypto Bonds and will not incur any additional costs,” Crowd for Angels said in a note to investors on Thursday.
“They will be able to be held in a digital wallet and also traded on an external exchange to potentially realise value.
“The bond proceeds will be used to invest in or acquire secured crowd bonds listed on Crowd for Angels’ own platform. However, the tokens will be used by the company in order to drive user traffic to the platform and increase investor engagement by using the tokens as rewards.”
Crypto or digital currencies such as Bitcoin or Ethereum have gained public attention recently amid the emergence of initial coin offerings (ICOs) — a fundraising method that rewards investors with supposedly-tradeable tokens in return for supporting a business using the blockchain technology behind cryptocurrency.
Regulators such as the UK’s Financial Conduct Authority have warned this area is high risk and
unregulated as there is no guarantee of returns or that the ICO will be a success.
Read more: Cryptocurrency providers eye P2P lending