INX has developed a regulated platform for cryptocurrency trading and an alternative trading system for security tokens, which it hopes will become a one-stop-shop crypto services platform. The move to raise money through an IPO is quite unusual by market standards, as generally crypto startups tend to raise capital via Initial Coin Offerings (ICO). On Monday, the company filed a draft prospectus with the US Securities and Exchanges Commission to sell 130 million of its tokens, which are based on Ethereum’s ERC-20-standard.
INX’s Three Key Services
INX’s platform aims to establish three key services. The first of these is INX Crypto, which intends to be a licensed money transmitter. Second is INX Services, which will be registered as a broker-dealer and an alternative trading system (ATS). Lastly, the company plans on setting up INX Solutions, a financial services business.
This announcement is somewhat of a milestone, as previously token sales had been for the most part unregistered. However, the rising number of fraud cases in the crypto market as of late has led to increased SEC prosecutions, and so INX’s move aims to bring more transparency to its crypto operations.
“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 firm said.
While purchasing these tokens will not give investors equity in the firm, it does entitle them to a share in the profits as well as placing investors ahead of shareholders when it comes to repayment in the event of liquidation. “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,” said the draft prospectus.
The Company will not complete the sale of INX tokens until it has raised gross offering proceeds of $5 million within one year.
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