In an IEO, a cryptocurrency project sells its tokens directly to investors through a third-party exchange platform. This method has gained popularity following the rise of Initial Coin Offerings (ICOs) due to its perceived benefits like increased security, regulatory compliance, and more significant trust from investors. Unlike ICOs, where the project developers conduct the token sale, IEOs give the exchange control over the process, including vetting the project and managing the sale on its platform, which can lead to a wider reach and reduced risk for investors.