The operator obtained approval from the Securities Commission to accept investment-in-kind for the fundraising campaign of LuxTag, a blockchain-based authentication service.
ECF financing platforms allow people to invest in early-stage and unlisted startups in exchange for equity in the company.
However, only angel and sophisticated investors will be allowed to make contributions in Bitcoin (BTC) and NEM (XEM) tokens.
Sophisticated investors are individuals with total personal assets exceeding RM3mil, and angel investors offer industry knowledge in addition to financial backing.
Investors must contribute a minimum of RM6,400 in crypto tokens and declare that they are not retail investors. (Retail investors are individuals who typically put down smaller amounts.)
PitchIn chief executive officer Sam Shafie said accepting BTC and XEM in addition to fiat currency is an integral part of the LuxTag ECF campaign.
“We believe it will set a precedent for other ECF issuers that utilise crypto tokens in their businesses who wish to expand their reach to global contributors,” he said, in a press release.
PitchIN will evaluate the market value of the crypto tokens before assigning the appropriate number of of LuxTag shares to investors.
LuxTag aims to raise a minimum of RM800,000 for a 4.76% equity in the company, valuing it at RM16.8mil.
As of press time, it has raised RM408,900 – its full target is RM2mil and it has another 51 days to complete its fundraising campaign.
LuxTag CEO Rene Bernard said in a Facebook note that while ECF guidelines already allow companies to source funds globally, crypto tokens make it easier to wire the investment.
LuxTag uses blockchain – the technology that powers crypto tokens and cryptocurrencies – to create tamper-proof certificates of authenticity and ownership for luxury items like handbags and watches.
Clients of LuxTag include the International Islamic University Malaysia and DagangNet which use its tech to authenticate educational credentials.
Swiss watchmaker Chronoswiss and American sports apparel company Defeet use Luxtag to authenticate goods.