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Hi, I’m Jean-Yves Sireau, the Founder & CEO of Binary.com. I started my first company in 1991 where I developed financial software for the French brokerage community. I moved to Hong Kong the following year where I worked as a money market dealer with Crédit Commercial de France (now HSBC). In 1993, I founded my own Hong Kong-based investment fund, Fortitude Group Inc. where I specialised in dealing futures and options on the Hong Kong Futures Exchange.
From 1997 to 1999, I started working on the systems and algorithms that would become the foundation of Binary.com today. We were initially funded with a USD 2 million investment by Jim Mellon’s Regent Pacific Group Ltd. We launched Binary.com (known back then as BetOnMarkets.com) in 2000 and now, 17 years and over USD 3 billion in turnover later, here we are getting ready for our ICO. It’s been quite a journey!
At Fortitude, I invested in various over-the-counter derivative products and I saw that there was no opportunity for retail investors to invest in the simplest of all derivatives contracts –– the fixed-odds trade. I wanted to implement a fixed-odds financial trading system that would give ordinary investors the chance to make small trades. To put it into perspective, before Binary.com came along, binary options were typically only traded in large quantities by big banks and hedge funds.
I think fixed-odds trading is possibly one of the most radical revolutions in the world of financial trading. Retail investors have traditionally been restricted to intraday trading or financial spread betting; both are high risk because they place limited restrictions on the maximum amount you can lose. With fixed-odds trading, your risk is limited because you cannot lose more than your initial stake.
Yes, and we even have the patents to prove it! We’re not resting on our laurels though. If you look at our track record, we’ve always been known for innovation. From releasing new trading platforms to complement our legacy platform, moving to open source and APIs, and even our rebranding to Binary.com in 2013 – we’ve never been afraid to reinvent ourselves. We know how crucial it is if we want to stay ahead in such a highly competitive industry.
Yes, that’s correct. We’ve been experiencing tremendous growth since 2010 and last year (2016) was particularly exceptional: More than USD 800 million in turnover from almost 140 million transactions on our platform.
Our long-term growth strategy is focused on four key pillars: technology, expansion, customer experience, and branding. Every strategic initiative we come up with must be able to enhance one or more of these pillars.
In November last year, we expanded into Forex and CFD trading via the MetaTrader 5 multi-asset trading platform. We’re working hard to attract new Forex and CFD clients to our MT5 platform by offering ultra-competitive spreads and leverage, zero-commission trades, and new assets such as cryptocurrencies.
We’re currently working on revamping our site to distinctly highlight our MT5 offerings such as currency pairs; metals; cryptocurrencies; and cash indices CFDs. We believe that we can entice new visitors to sign up by giving them a clear overview of our entire suite of products and services, plus the benefits of trading with us.
We’re also experimenting with highly-targeted online advertising campaigns to increase awareness and drive traffic to our site from relevant prospects. Of course, merely getting traffic is not enough. That’s why our site revamp is important. We want to make sure we convert visitors into clients as well.
There are a few that we are aware of, including competition from companies with greater financial and technical resources.
We take every potential risk very seriously. Over the years, we’ve implemented processes that allow us to continually assess, and manage the risks to our company. For example, we have an internal audit team that regularly reviews existing the systems, processes, and controls of high-risk areas including IT security, payments, and regulatory compliance.
At the end of the day however, all the processes in the world mean nothing if we do not possess the right approach to compliance or risk management throughout the company. That’s why we place such a high emphasis on business integrity when it comes to hiring. And our conduct as a business is always driven by our core values –– including integrity, tolerance, diversity, and equal opportunity –– that are deeply embedded in our company culture.
We’ve been in business for a very long time and our track record speaks for itself. The thing that I’m most proud of is our constant and unwavering commitment to serve our clients with integrity and reliability. We’ve been doing that since Day 1.
We also have our intellectual property; an innovative product range consisting of financial and synthetic instruments; and licences to operate in strategic countries and regions such as Europe and Japan. We also have a senior management team with more than 30 years of collective experience in the industry, and solid foundations that will allow us to adapt and scale to new trends and markets.
The next step for a company of our size and maturity is naturally to go public through an IPO, so we can further our growth by raising fresh capital through the sale of shares. However, performing an IPO is a slow and inefficient process that’s remained unchanged for decades.
We believe that traditional stock exchanges will be gradually replaced by blockchain exchanges, and IPOs will be gradually replaced by ICOs. This is because blockchain technologies are more efficient than the legacy technologies used by stock exchanges.
That’s why we chose to go with an “IPO on the blockchain” instead. We get a wider reach of investors, lower costs of trading, and an immutable and public audit trail of transactions on the blockchain. Through this ICO, we can also increase awareness of our products and services among the cryptocurrency community, which is natural demographic for our trading platform.
Yes, there are some concerns. But ultimately, we believe that our approach will allow potential investors to see how different we are from the rest of the ICOs available today.
We’re performing this ICO as a genuine substitute for an IPO so we’re implementing best practices in corporate governance, investor disclosure, and transparency. For instance, prospective investors can read our Information Memorandum to see our full financial history and all the risk factors associated with our business.
We hope to set a new standard in how ICOs are carried out. If anyone wants to perform a securities-backed offering, they can use Binary.com as the perfect example.
We intend to use the funds raised from the token sale to pursue organic growth and to generate higher shareholder returns by investing in high-growth initiatives that can simultaneously boost our core commercial capabilities.
These high-growth initiatives include new and further development of offices and related licence applications in strategic jurisdictions; injection of working capital for our Japan office to support its growth plans; enhancement of technology and IT infrastructure to enhance our competitive advantage; increase in digital and automated marketing spend; and further development of our operational presence by expanding our technical, customer support, and business development capacity.
We are issuing up to 10 million smart tokens on the Ethereum blockchain to investors. Unlike most ICOs however, our securities-backed tokens come with real economic benefits.
Firstly, each token gives you the right to receive payments equivalent to the dividends paid by Binary.com on its Ordinary Shares. This means that you can share in the future success of the company in the same way as shareholders.
Secondly, we’ve reached an agreement with the Lykke.com cryptocurrency exchange to list our tokens where they can be traded and potentially increase in value. Lykke is a Swiss fintech company that’s building a global blockchain-powered marketplace for securities-backed tokens.
If you own our tokens, you have the right to convert your tokens into Ordinary Shares –– subject to certain conditions of course.
The reason that they don’t represent shares directly is that corporate laws in most jurisdictions do not yet support blockchain-based share registers. That’s why the tokens are issued as derivative securities that come with the right to be converted into Ordinary Shares instead.
Bear in mind that Ordinary Shares cannot be traded on any exchange so we believe the tokens are a superior investment to Ordinary Shares.
Our tokens will be offered via a Dutch auction process on our website where the price for each token will be determined through a bidding process.
Before you can take part in the bidding process, you must open a Binary.com real money account and complete our Know Your Client (KYC) authentication procedure. After that, you can fund your account using the available cashier facilities. These funds will be used to bid on our tokens.
We’ve recently introduced cryptocurrency denominated accounts to allow potential investors to place bids in a cryptocurrency such as Bitcoin, in addition to the fiat currencies we already support such as USD and EUR.
Successful bidders will be credited with the token allocations in their Binary.com account. Unsuccessful bidders will have their bids refunded to their Binary.com accounts as soon as reasonably possible in the same currency and amount.
We decided to go with a Dutch auction so the price for each token can be determined through a bidding process, rather than being pre-set by us. Companies such as Google relied on a Dutch auction to determine a fair price when it launched its initial public offering.
Essentially, prospective investors will enter bids for the number of tokens they want to purchase as well as the price they are willing to pay. For example, an investor may place a bid for 100 tokens at USD 1.5 per token while another may place a bid for 500 tokens at USD 1.6 per token.
Once the ICO ends, the tokens will be assigned to the bidders from the highest bids down, until all allotted tokens are assigned. However, the price that each successful bidder pays is based on the lowest price of all allotted bidders.
The ICO will only be available to residents of selected countries. And in certain countries, the ICO is only available to qualified or professional investors, in line with the rules and regulations of those countries. Prospective investors can go to https://ico.binary.com and select their country on the Information Memorandum page to see if they qualify. (The Binary.com ICO is expected to launch in late 2017)