Unlike an ICO (Initial coin offering), an IEO (Initial exchange offering) is not open to the public. You’ll have to be a user of the hosting exchange to participate in the token sale. While an ICO allows any contributors to buy the token for sale by sending funds into a specific address, an IEO requires contributors/users to buy the token by using the exchange’s accounts.
The biggest problem with ICO is that it is not monitored by any third parties. Basically, anyone can launch an ICO, as long as you have a white paper to convince investors to put funds to your company.
On the other hand, IEO is a very, if not entirely, different model. While both ICO and IEO share the similar rationales of Initial Public Offering (IPO). In an IEO, an exchange is an administrator.
To conduct an IEO, the project team must meet and comply with the exchange’s requirements in order to launch the token sale. Contributors are, therefore, protected by the exchange.