INX Limited is a cryptocurrency exchange startup which plans to do an IPO as their token sale. The main difference is that this time the whole party wants to be properly regulated. While it is known that the 2017 ICO craze was completely unregulated and everybody could get away with it, then now those days are over for good. Now it appears that INX has filed their IPO with the SEC and wants to do this “the right way”.
On Monday, they filed a draft F-1 with the SEC. It’s worth mentioning that INX is registered in Gibraltar. That way they are showing that they want to market their tokens to retail and institutional investors through their IPO. Yes, their main audience for this IPO is institutional investors, but the platform will be available for the general public. Of course, these customers will have to go through AML and KYC procedures.
“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,” reads the draft.
Additionally, the exchange plans to differentiate security and non-security blockchain assets. That would be the main thing which would separate them from their competitors. Also, their future plans include establishing a platform for derivatives such as futures, options, and swaps. That way they plan to compete with Overstock‘s tZERO, Coinbase Prime, Fidelity Digital Assets, and Bakkt.
However, for all this to work, INX still has to wait for SEC’s decision on the company’s draft prospectus before they can proceed with the token sale. The SEC has to deem this prospectus “effective” in order for the company to move to another stage. Moreover, for the company/exchange to actually start operating INX still need to obtain a few regulatory approvals. For example, they have to become a broker-dealer. That requires a separate registration with the SEC and acceptance into FINRA, as well as a self-regulatory organization (SRO), and an alternative trading system (ATS), which requires filing additional forms with the SEC. But that’s not all – to fully operate as a crypto exchange where users can sell and buy crypto, they would need a money transmitter licensees from multiple states where they want to do business.
While the exchange still has a ton of work to do regulation-wise, the company and its backers might be a different subject to investors, when speaking in terms of finding reasons on why to invest in such a company. INX’s team and early investors are some pretty prominent figures in the crypto and financial worlds. For example, INX’s advisors include Jameson Lopp, Samson Mow, and Mark Yusko. Also, the early investor list includes Charlie Lee, as well. These facts are a good reason enough to invest in such an IPO.