Crypto Exchange INX Limited to Acquire Openfinance Broker-Dealer and ATS Business

UTC by James Lovett · 3 min read
Crypto Exchange INX Limited to Acquire Openfinance Broker-Dealer and ATS Business
Photo: Openfinance / Twitter

Investors would be able to efficiently trade security tokens on the Openfinance platform following the acquisition.

On Tuesday, INX Limited issued an official press release stating that it had already signed a term sheet for the acquisition of U.S. broker-dealer OpenFinance. The Securities Investor Protection Corporation and the Financial Industry Regulatory Authority had approved Openfinance as a registered broker-dealer.

Deal between INX and Openfinance to Bolster Capital Raising

INX is not only set to acquire the broker-dealer but also intends to acquire Openfinance’s alternative trading system (ATS), known for facilitating transactions in non-publicly-traded securities. In the deal, the company will benefit from the broker’s systems, client base, digital asset listings, and licenses. Through the acquisition, INX would bolster its position as a novel trading and capital-raising tools provider.

Blockchain Capital, a major industry venture capital firm, together with and Spice V.C., are some of the companies taking part in Openfinance’s listings. Provision of service and operations to Openfinance’s customer base will continue after the acquisition, as assured by INX’s representatives.

INX president and founder Shy Datika assured stakeholders that the new acquisition would boost INX’s leadership position within the digital assets’ ecosystem, saying:

“Digital securities represent a new evolution in traditional capital markets. There are massive benefits of listing and trading digital assets versus traditional equities. Openfinance has pioneered this space and earned the respect of Wall Street, the blockchain community, and U.S. regulators.”

Although there was no disclosure of the terms of the deal, Datika revealed to Reuters in a phone interview yesterday that Openfinance had managed to raise $25 million since 2017, further placing the company’s valuation at a range between $40 million to $70 million.

Investors would be able to efficiently trade security tokens on the Openfinance platform following the acquisition. Openfinance offering – a broker, operating in Chicago and with offices in Pennsylvania and New York – is a blockchain-based clearing and settlement platform that enables companies to use security tokens to raise capital.

INX Aims to Strengthen Its Position in the U.S. Crypto Market

Both accredited and non-accredited investors will trade on the platform 24/7. Custodians, brokerage houses, banks as well as transfer agents are the primary customers that will be transacting on the platform.

Jim Stonebridge, CEO of Openfinance, also praised the new deal that his company had entered with INX. He stated that both Openfinance and INX share a similar vision of the provision of a safe and regulated ecosystem that accommodates listing and trading of various digital assets.

In that perspective, Stonebridge noted:

“We believe that regulatory oversight, combined with liquidity, will make digital assets the financial instrument of choice for companies and investors seeking to access and raise capital. The consolidation of two leading platforms will be the catalyst needed to move this industry forward.”

The latest news concerning the acquisition comes amid INX’s efforts to strengthen its status on regulated activities so as to penetrate through the U.S. crypto market. In August this year, INX sought U.S. Securities and Exchange Commission (SEC) approval and launched the first security token IPO for retail and institutional investors. The Gibraltar-based firm intends to raise $117 million before the year ends by selling its 130 million virtual currency at a price of US$0.90. Finally, if INX manages to secure the broker-dealer license and get SEC’s approval, it intends to launch a crypto derivatives platform for trading swaps, options and futures.

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