03.18.2022

INX ATS Prepared for Securities Token Listings

03.18.2022
Shanny Basar
Warsaw Stock Exchange Aims to Continue IPOs

INX Group, which includes regulated trading platforms for digital securities and cryptocurrencies, plans to offer non-deliverable cryptocurrency forwards to banks and to announce primary issuances and new secondary trading listings of regulated securities tokens.

Douglas Borthwick, chief business officer at INX, told Markets Media that it is the only group that includes an inter-dealer broker, a cryptocurrency trading platform, a digital securities platform and that is regulated by Finra and the US Securities and Exchange Commission.

Douglas Borthwick, INX

“No-one else has all these,” he added. “We have an ability to deal with retail and institutional investors, and from Bitcoin to registered securities.”

Borthwick has over 25 years of experience in the finance industry, most recently founding and building the Chapdelaine FX electronic and voice trading business for inter-dealer broker TP-ICAP from 2012 to September 2018.

He continued that another differentiator is that the firm listed the INX Token in July 2021. The token was previously offered in the world’s first public offering of an SEC registered digital security on the INX Securities trading platform. In April 2021 INX had closed its IPO with $83.6m in gross proceeds from more than 7,300 retail and institutional investors.

Shy Datika, co-founder and president of INX, said in a statement:   “When we founded INX in 2017, we envisioned a new future of what we called ‘Capital Markets 2.0’. A vision of digital securities replacing the role of equity in the markets for capital raising and trading.”

The SEC approval process for the digital security IPO took 950 days but Borthwick explained that working with the regulator was important to create a path for all securities to trade on the blockchain. He said: “We like to see regulators in the passenger seat, rather than in the rearview mirror.”

Listings

Borthwick added that INX’s IPO is almost one year old and the firm has been spending time educating large funds and banks. He said: “I think people saw that this actually works and there are a lot of prospectuses lining up at the SEC to do IPOs this way. That is something that we helped to invent.”

ALK Capital, owner of the English Premier League’s Burnley Football Club, has signed a letter of intent with INX to list a publicly traded digital security token linked to specific club revenues. Burnley aims to work directly with its fanbase to build upon the team’s financial foundation with a digital security that is expected to pay dividends to holders that should fluctuate with the team’s successes on and off the field.

In addition, Borthwick said a number of companies that trade on the OTC Markets in the US want to transfer their listing to INX, as security tokens cannot be shorted. In addition INX is open 24 hours a day, seven days a week, 365 days a year so investors outside the US can trade in their own timezone.

“Trading hours at exchanges harken back to the days where news came out twice a day in the morning and evening papers,” he added. “Sometimes we do more volume on the weekend than our competitors do from Monday to Friday.”

INX aims to list tokens for public companies and for private companies that want to raise capital.

Institutional trading

Borthwick said credit meditation and regulated custody offerings for digital securities will be critical for institutions to enter the digital asset market.

“As these develop you are going to find institutional capital being deployed much more readily,” he added. “Right now the landscape is very fragmented but we are working on ways to ease the fragmentation.”

In order to help build the digital asset ecosystem  INX acquired Tokensoft Transfer Agent, an SEC-registered transfer agent owned by Tokensoft in January 2022.  Tokensoft Transfer Agent facilitated the issuance and listing of some of the earliest SEC-qualified digital securities, such as the INX Token and Arca’s ArCoin.

INX said the acquisition will allow INX Securities, INX’s US-regulated digital securities broker-dealer and ATS, to offer a complete ‘nose to tail’ solution to public and private companies seeking to raise capital and list digital securities.

In addition, INX’s inter-dealer broker, I.L.S. Brokers, plans to offer non-deliverable cryptocurrency forwards to Tier-1 banks in the near future.

Canadian listing

In January 2022 the INX Digital Company started trading on the Canadian Neo Exchange.

Datika said in a statement: “We believe that the traditional $120 trillion equities markets must evolve and we were the first SEC-registered initial public offering of a digital security and among the first companies to obtain regulatory clearance for digital assets securities issuance and trading. We believe the NEO Exchange to be an innovative leader in capital markets that seeks to take capital raising and trading to their next evolutionary level.”

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