Trailblazers In Unchartered Territory: INX, The First SEC-Registered Token IPO INX Limited is enabling the future of finance by creating a new asset class; with higher flexibility and innovative functionality for asset listings, trading and governance.
We are witnessing change across all industries in this post-pandemic world, and capital markets are no exception. Security tokens have arrived, and there is no going back.
Security tokens serve as a bridge between the traditional capital markets we’ve all grown up with, and the shiny new blockchain. The result? Tremendous benefits for both sides. In its simplest form, investing in security tokens is comparable to purchasing shares of public companies, with the exception of them being on the blockchain. But there is so much more to them.
With security tokens, investment opportunities expand to the point where they are essentially limitless. Instead of being limited to owning shares of an entire company, security tokens allow institutional and retail investors to invest in the specific projects, cash flows, ideas, and concepts of a company. Additional types of assets that can be tokenized include artwork, real estate, athletes, race horses, celebrities, and so much more. Since blockchain technology manages to break assets into fractions, folks no longer have to purchase an entire sculpture or house for investment purposes. Traditional, illiquid and exotic assets become extremely liquid. This is a concept that seemed far fetched even five years ago, due to the lack of regulatory alignment.
That is, until INX Limited burst onto the scene mid-2020, with their ground-breaking INX token currently being sold in the first SEC-registered token IPO. INX was built from the ground-up with regulation in mind, and their security token and platform introduces the next step in the evolution of capital markets in the following ways:
- Migrating traditional assets off legacy exchanges onto the blockchain (digitization)
- A wider range of financial instruments and finance possibilities
- Raising capital for fractional and illiquid assets (e.g. partial ownership in real estate projects, art, specific patents or projects of a company).
- Reduced trading costs as a result of efficient processes
- Increased access to global capital and investors
- Automated KYC/AML compliance
- Safe trades between cleared counterparties
- Increased transparency and privacy
Security tokens themselves often fall under the full scope of relevant security regulations, which vary between jurisdictions. That means many of the advantages of tokenization can be undermined if regulations prevent the free and international exchange of tokens. This is a concern that won’t last very long though, because as seen with INX, the traditional market infrastructure is adapting to the token economy.
INX Limited was founded by financial market, cryptocurrency and technology experts with a shared vision of revolutionizing the world of finance and financial crypto trading. Its President/Co-Founder, Mr. Shy Datika, has more than 25 years of experience in the banking and finance industry. He had a significant role in the adoption of electronic trading in the global OTC foreign exchange (OTC Forex) market as well as in brokerage and online trading businesses.
It took almost three years to finalize INX as the first registered blockchain asset offering. During that process, it became clear that 75 years of regulation had to be applied and adapted to a brand new token and blockchain platform. Another complication stemmed from the fact that INX Limited, being based in Gibraltar, had to deal with a non-traditional jurisdiction. There were a series of back-and-forths with local lawyers taking one approach, followed by US-based lawyers teamed with Ernst & Young taking another approach, and mandates from the SEC which ultimately superseded the rest.
Once the INX token and trading platform construct became finalized, it became clear that the SEC registration of INX played a significant role in pioneering the advancement of the practice of regulating digital assets. The process that INX Limited went through in the name of regulation ended up creating a precedent and pathway for all offerings that follow, setting a gold mstandard that benefits the ecosystem as a whole.
Their efforts were well timed, and word spread quickly. Within 3 days of opening, and with an offering price set at $0.90 per Token, and a minimum investment of $1,000, INX announced they had raised over $7.5M USD in their rolling initial public offering, exceeding the minimum requirement, and allowing them to start accepting crypto in the form of BTC, ETH and USDC, along with USD wires as payment for their tokens – another first for a US Security offering! They also announced that over 3,000 retail and accredited investors had registered for the INX token in that limited amount of time. In that same announcement, INX went on to declare their intention to use the net proceeds raised from the sale of INX Tokens to launch their regulated trading platform for digital assets, including cryptocurrencies, security tokens, and their derivatives, for the establishment of a cash reserve fund, and for the continued development and operation of INX Trading Solutions.
This week, INX announced that it is acquiring Openfinance. Openfinance is known for transforming alternative asset investing with the first trading platform for the secondary trading of digital securities. Openfinance provides unprecedented access to liquidity and investment opportunity in the $8.8 trillion alternative asset market. Subject to FINRA approval, INX will acquire Openfinance’s broker-dealer and ATS licenses along with additional assets such as systems, digital asset listings and client base. The acquisition will double the INX/Openfinance registered user base to over 10,000. By adding the incredible achievements of Openfinance to the INX portfolio, INX will be able to offer investors more access to liquidity and significantly accelerate their time to market in launching their digital trading platform.
The INX token offering is ongoing at token.inx.co. INX continues to break new ground, paving the way for a new phase in capital markets with digital asset trading open to retail and institutional investors.