A company called INX is building a marketplace for trading cryptocurrencies and digital assets that comply with existing securities laws.
This week, the company launched a new version of its exchange, dubbed INX One, that lists both cryptocurrencies and “security tokens” for trading. It also allows companies that have registered their security tokens with the SEC to offer them for sale, kind of like an initial public offering.
Security tokens are digital assets that trade like bitcoin and other cryptocurrencies, but have gone through the vetting and registration process with the SEC or overseas regulators.
Virtually anything — art, real estate, equity, bonds — could be “tokenized” and sold in this form. It’s an expansive way to look at capital markets.
“We are coming from the vision that each time a company raises money from the public, from my grandmother, from my mother, from my daughter, it has to be under a prospectus,” said Shy Datika, the co-founder and president of INX.
The platform INX built allows for initial offerings and secondary trading of these assets. The company’s onboarding process sifts between accredited and unaccredited users, so not every offering would be available to every user.
INX is one of several companies — others include tZero, Prometheum and Aktionariat — that are building platforms for trading security tokens. Still, the market for security tokens is tiny and largely illiquid: INX said it will list about half a dozen at its launch, including its own.
A website called Security Token Market tracks about 200 security tokens, from both the U.S. and overseas. Only a handful have trading volumes over $5,000 a day.
This model, though, is exactly the kind of thing Securities and Exchange Commission chief Gary Gensler has been talking about.
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September 23, 2022 at 04:27AM
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