Gibraltar-based cryptocurrency trading platform simply known as INX is planning a public offering registered with the Security and Exchange Commission(SEC). In the planned public offering in which INX aims to raise about $130 million dollars, the exchange will be the first SEC-approved crypto exchange to offer security tokens.
On Monday, as per a draft sent to the SEC, INX had proposed to issue security tokens in a planned IPO through which it planned to raise funds through the sale of 130,000,000 INX tokens which are ERC-20 based. INX token holders will also be entitled to 40% of the company’s overall cash flow from operating activities, but not as equity holders. The exchange noted in the draft that the minimum offering requirement is $5,000,000.
The Use Of INX Within The Exchange
According to the exchange platform, the INX Token may be used as a form of payment for transaction fees on the INX Securities trading platform, the proposed platform for the trading of security tokens, and INX Tokens are entitled to, at a minimum, a 10% discount as compared to other forms of payment. However, INX Tokens may not be used as payment for transaction fees on the INX Digital trading platform.
INX Warns Investors
The exchange further maintained that, there is currently significant uncertainty with regards to the application of federal and state laws and regulations to the trading of security tokens, including regulations governing market intermediaries, and this uncertainty, according to INX, may cause significant delay or may prevent the trading platform from developing its INX Securities trading platform and utilizing the INX Token as currently envisioned.
INX aims to run two trading platforms with distinctions between security and non-security tokens. It also plans to get relevant regulatory licenses and approvals including a U.S broker-deal license. According to the platform,
“when fully operational, we expect to offer professional traders and institutional investors trading platforms with established practices common in other regulated financial services markets, such as customary trading, clearing, and settlement procedures, regulatory compliance, capital and liquidity reserves, and operational transparency,”
The news of INX planning to offer security tokens under SEC regulations spells more than adoption for blockchain and cryptocurrencies in general. Before now, crypto firms have struggled to make it past the SEC in terms of regulatory compliance. However, a couple of projects had a breakthrough while performing tokens offerings which were basically utilities. Another milestone has now been recorded with news of INX joining the pack, but this time, being the first of its kind to offer securities.