INX Limited is a crypto exchange startup, and it plans to raise up to $129.5 million through an IPO. It is a landmark event, as it is the first security token sale registered with the U.S. Securities and Exchange Commission (SEC), Coindesk reports.
INX, which is domiciled in Gibraltar, filed a draft F-1 (the SEC’s prospectus form for foreign issuers) with the agency on Monday and will market the tokens to retail and institutional investors through the initial public offering (IPO).
It’s a major milestone, since to date token sales have been unregistered. Furthermore, INX’s sale would also be one of the very few fully-fledged IPOs in the blockchain industry, and almost certainly the largest.
The draft prospectus says, “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.”
This means INX will be competing with a number of institutionally-focused, regulated trading platforms launching this year, although INX offers the biggest array of digital assets.
“Our vision is to establish two trading platforms and a security token that provide regulatory clarity to the blockchain asset industry. We plan to achieve this [in part] by differentiating between security and non-security blockchain asset classes and providing trading opportunities for each class,” says the prospectus, later adding: “In the future, we intend to establish a platform for the trading of derivatives such as futures, options and swaps.”
Although it is a security, INX’s token could also be described as a utility token, since holders will have the option of using it on the INX Exchange to pay transaction fees. At the same time, token investors will get a share of INX’s profits, though they won’t be equity holders: they will however stand in line ahead of shareholders to get repaid, in the event of a liquidation, making the token similar to preferred stock options.