NEW YORK, August 24th, 2020 INX Limited stated that the Securities and Exchange Commission (SEC) has declared ‘effective’ the registration statement Form F-1, which is the SEC’s prospectus form for foreign issuers.
The Offering price set by the company is $0.90 per Token with a minimum investment of $1,000. One hundred and thirty million tokens are available, which means that the $117 million made from their sale will make this the biggest cryptocurrency IPO in the blockchain industry.
INX intends to stimulate the escalation of regulated digital asset opportunities for institutions, and direct investors while it develops its Trading Solutions suite.
“Our vision is to establish two trading platforms and a security token that provides regulatory clarity to the blockchain asset industry. We plan to achieve this [in part] by differentiating between security and non-security blockchain asset classes and providing trading opportunities for each class.”The INX Prospectus
INX is an ERC-20 token; therefore, investors must have an Ethereum wallet address to participate in the sale. The exchange would not direct tokens to Ethereum wallet platforms of potential competing exchanges, similar to Bitfinex, Bitstamp, Bittrex, Cex.io, Coinbase, Jaxx, Kraken or Poloniex.
The company plans to raise approximately $129.5 million through an IPO. Once the minimum capital has amassed, further development of the platform can proceed, generating a new Cash Fund to meet the cost of a U.S. broker-dealer licence. The intention is that the Fund will also protect both company and customers in the event of a data breach, counterparty default or trading execution error.
A percentage of the proceeds raised from the Token Sale will finance a regulated solution for blockchain transactions that will include cryptocurrencies, security tokens, and their derivatives.
“In the future, we intend to establish a platform for the trading of derivatives such as futures, options and swaps.”The INX Prospectus
The prospectus emphasises that high-profile industry figures like Monero’s former lead maintainer, Riccardo Spagni, and Charlie Lee, the creator of Litecoin have already heavily invested.
Registration with the SEC
“Our vision for INX and the INX Token required a solid foundation of regulatory clarity for security tokens and cryptocurrencies. Gibraltar’s regulators were ahead of other jurisdictions on forging a path in this respect, and so INX was glad to make it our home.”Shy Datika, Founder and President of INX
The SEC declared the registration effective relating to these securities in late August. The prospectus includes several disclosures that are common to publicly listed companies, however, are exceptional in the crypto industry.
Cryptocurrencies are a fundamental manifestation and do not correspond to old financial categories. Therefore several regulatory agencies have challenged jurisdiction over various sections of the industry. Thus obtaining verification signatures from multiple agencies was required before proceeding with the token sale. Yet more approvals will be necessary for the exchange to open for trading.
Before becoming a broker-dealer approval as an Alternative Trading System (ATS) must be granted by the SEC. Also, acceptance into the Financial Industry Regulatory Authority (FINRA) and Self-Regulatory Organisation (SRO) has to be approved, only then can INX list its security tokens.
The company will require money transmitter licenses from individual states where it intends to operate as a cryptocurrency exchange.
“It is a matter of some pride for Hassans, INX and for Gibraltar that the first security token offering approved by the SEC for distribution to the US public isn’t a US entity – it is a Gibraltar company, constituted and operating under the Laws of Gibraltar. “Aaron Payas, Partner with Gibraltar based Hassans International Law Firm
INX Limited is a Gibraltar-based private company formed in 2017. Its board includes Thomas K. Lewis former CEO of the predecessor company to TD Ameritrade, and David Weild, a former vice-chairman of Nasdaq.
The crypto advisors include bitcoin security advocate Jameson Lopp, Morgan Creek Capital Management CEO Mark Yusko and Blockstream chief strategy officer, Samson Mow.
INX has strived to register with the SEC for over two years, but then, Rome wasn’t built in a day, and lots of hoops still need jumping through before this project begins to turn a profit.
- Acquire the necessary regulatory licenses, approvals, and register as an ATS.
- Separation of security and non-security blockchain asset classes, providing trading opportunities for each category.
- Issue the security token, the INX Token, and maintain the INX Registry, reflecting an up-to-date list of INX Token holders.
- Demand that all INX Token holders comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) practices.
- Allow specific rights and benefits to the holders of INX Tokens.
“It is the Company’s intention that the INX Token holders’ claim for breach of contract will be senior to the rights of the holders of the ordinary shares of the Company in liquidation,”The INX Prospectus
INX has priced 130 million INX tokens at $0.90 each, setting the maximum raised at $117 million.
The target clientele is mainly institutional investors, though crypto trading on the exchange will be available to the general public, on the proviso that they go through anti-money-laundering and know-your-customer screening.
INX tokens will be available for purchase with the U.S. dollar. However, if the sale exceeds the minimum $7.5 million raised, INX will accept pledges made in USDC, bitcoin and Ethereum.
Nevertheless, it is dubious that token holders will make gains in the first year. The prospectus indicates a lack of revenue produced since the company formed in 2017 and even made a $3.7 million loss in 2019.
The securities are ERC-20 tokens on the Ethereum blockchain. They can be used against transaction fees furthermore conferring holders the right to earn 40% net cash flow cumulated on an annual basis when the platform begins to take profits. The Tokens will not bestow ownership of the company themselves. But Token holder repayments are before shareholders in the event of a liquidation.
Although the first to become registered INX will not be the last as several crypto companies are seeking to become compliant to the US regulations.
Disclaimer: Opinions expressed at Bitcoin News Agency are not investment advice. Investors should do thorough research before investing in Bitcoin, digital assets or cryptocurrencies. Please be advised, transfers and trades are at your own risk, and any loses incurred are your responsibility. Bitcoin News Agency does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Bitcoin News Agency, an investment advisor. Please note that Bitcoin News Agency participates in affiliate marketing.
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