MOCA Coin Turns Heads as Animoca Brands Explores IPO

Animoca Brands launched its own token, MOCA Coin, on Thursday. The launch turns heads, given the rarity of public companies in crypto making such a move.

The GameFi and metaverse giant is planning to go public in early 2025 in Hong Kong or the Middle East. The two regions are famous for their favorable stance towards cryptocurrency.

MOCA Coin Soars to $141 Million Market Cap

Following its launch, MOCA Coin skyrocketed by over 90%, with CoinGecko data showing a market capitalization above $141 million. Serving as a utility token in Animoca’s ecosystem of Web3 games and applications, it will help expand Animoca Brands’ network and boost the conglomerate’s growth.

“Mocaverse and MOCA Coin represent cultural capital that today may appear objectified (like most NFTs). However, it will become more social and symbolic in meaning and purpose. This is as Mocaverse’s reputation layer grows and increasingly rewards and incentivizes the creation of cultural capital,” Animoca Brands co-founder and executive chair Yat Siu wrote in a Medium post.

The surge in market capitalization is unsurprising given Animoca Brands’ heft as a leading force in the cryptocurrency gaming and metaverse sectors. However, the token launch stirred debate, given the company’s plans to go public early next year.

In hindsight, the Australian Securities Exchange (ASX) delisted Animoca Brands in 2020 for owning token-issuing entities like The Sandbox (SAND). The regulator cited questionable governance and the use of simple agreements for future equity (SAFEs) in its subsidiaries. Despite submitting a 39-page report to address these concerns, the ASX delisted the company.

SAFEs provide a straightforward and efficient way for startups to raise capital, avoiding complexities associated with traditional equity financing instruments. They allow investors to invest in early-stage companies and participate in their growth potential while mitigating some risks typically associated with early-stage investments.

Amid regulatory uncertainty, public companies remain skeptical about issuing their own tokens. Coinbase, for example, has not launched a token despite going public on the Nasdaq three years ago.

Skepticism for firms doing business in the US comes amid tough regulation from the US Securities and Exchange Commission (SEC). According to the regulator, companies deceptively use Initial Coin Offerings (ICOs) to raise capital from investors without clear disclosures, as the law requires.

The regulator sued multiple firms for raising funds through unregistered ICOs. Among them are smart contract-auditing firm Quantstamp, Token Metrics CEO Ian Balina, and Loci Inc. and its chief executive, John Wise. The regulator also investigated Binance and Ripple on ICO-related claims.

Animoca Brands CEO on Token Launch

According to Yat Siu, the token launch does not compromise its oncoming initial product offering (IPO) because it is not equity. Speaking to a news site, the Animoca Brands executive said it is a utility token with “no profit sharing and no claim to profit.” This means MOCA Coin holders will not receive earnings per share against their holdings.

It is worth noting, however, that Animoca Brands does not do business in the US, unlike Coinbase. This puts the firm and its executive chair outside the purview of the US SEC, led by chair Gary Gensler.

In late June, the SEC chair highlighted compliance issues within the crypto industry. He noted that securities laws are established to safeguard investors and maintain fair, orderly, and efficient markets. Gensler added that when tokens and platforms fail to provide necessary disclosures to investors, this lack of compliance poses risks to the public.

“And we have a set of pretty clear rules. There’s nothing inconsistent about crypto securities and the securities laws,” he stated.

Furthermore, Gensler warned that moving operations abroad would not excuse crypto companies from following US securities laws. The regulator’s stance reflects the challenges of complying with regulatory restrictions in the US.

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