Blockchain firm Blackmoon is selling tokens pegged to Xiaomi share price without the authorization of the company.

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Russian blockchain company Blackmoon is selling a token pegged to Xiaomi’s share price in an Initial Coin Offering (ICO), which has not been authorized by the Chinese smartphone maker.

Blackmoon’s BMxXMI Token Offering

Blackmoon announced last month its plans to tokenize Xiomi’s Initial Public Offering (IPO), which will initiate July 9 on the Hong Kong stock exchange.  Interested parties can already buy the so-called BMxXMI, which is “referenced by the shares of the Xiaomi Corporation.” The payment options include Ethereum (ETH), Bitcoin (BTC) or Litecoin (LTC). Blackmoon explains on its website that the proceeds raised in the ICO will be converted into fiat currencies and transferred to brokers, who will subsequently purchase Xiaomi’s stocks from the secondary market on investors’ behalf.

Blackmoon CEO Oleg Seydak told the South China Morning Post on Tuesday that after conducting a poll on social media, it emerged that “many people said that they are interested in participating in the IPO through tokens.” Chief operating officer Sergey Vasin reaffirmed that there was appetite for Xiaomi shares from the virtual currency community and Blackmoon wants to target investors that may not have easy access to Xiaomi’s IPO.

While revealing that tokens had already been sold in France, Germany, and the UK, Vasin refused to disclose the quantity of BMxXMI sold, as well details of the brokers who reportedly will act on investors’ behalf.

Xiaomi Disavows Token Sale

Last week, Xiaomi raised $4.7 billion after pricing the sale of 2.18 billion shares at HK$17 each. This estimates the world’s fourth-largest smartphone manufacturer at $54 billion, roughly half the company’s initial goal.

Responding to a request for comment on the BMxXMI token sale, Xiaomi told the South China Morning Post that it has no knowledge of the ICO scheme and did not approve or endorse Blackmoon’s project.

Blackmoon is not the first token project that has piggybacked on the name or brand of a well-known company. Earlier this year, Dubai-based Alibabacoin Foundation issued a digital currency of the same name and distributed it via an ICO, raising over $3.5 million. Alibaba Group filed a lawsuit against the company for confusing the public with the “prominent, repeated, and intentionally misleading” use of its trademark. However, a judge in a US court ruled against the lawsuit and accompanying restraining order.



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