After INX raised $85 million from 7,200 individual and institutional investors in the world's first SEC-registered security token ICO, it has now successfully listed its shares as well on the Canadian NEO exchange raising additional $40 million in the process.
Mass adoption of cryptocurrency is no longer in question. With all major countries legislating for crypto and digital assets use and taxation, it is only a question of “when.” Globally, blockchain technology is proving time and time again just how much more efficient and secure financisl assets and trading can be opposed to the legacy financial instruments that haven’t changed in decades.
Blockchain (and crypto as an application of blockchain) seem to be strong candidates to become the evolution of capital markets with ample inherent benefits for retail and institutional investors alike. Governments try to prepare for this likely migration with permissive legislation (as opposed to a preventative one) addressing tax issues, custodianship, and transfer of crypto assets across agencies and international committees.
Until recently, crypto traders have essentially had only illegal exchanges to trade on due to the lack of regulation. Any and all forms of trading or issuance require regulatory compliance in every country, and anytime a national government decides to embrace alternative financial instruments such as blockchain for capital markets’ use, they are also executing a crack-down on the illegal (non-regulated) exchanges and activities that offer services inside of their borders.
Recent examples include the South Korean shut down most of the crypto exchanges operating in the country, Binance being shut down in Singapore and blocked in the UK, and China banning all non-regulated crypto trading in general. Blockchain-based financial instruments and asset classes are NOT the future – Its REGULATED version, is.
Why Regulate Decentralized Finance
There are many methods for threat actors to take advantage of the non-sophisticated retail investors and even use crypto for money laundering. Moreover, crypto is used as payment for ransomware attacks due to the inherent anonymity of the destination address associated with the ransom demand and much more. This phenomenon has led many countries to ‘hunt’ after exchanges that facilitate crypto's “darker side”.
INX Becomes World’s First SEC-Approved Crypto Exchange
Since 2018, INX has been working with the SEC to establish the world’s first regulated crypto exchange. It took over four years of development and writing the book on regulatory issues, compliance, and financial legislation. The main goal was “to do it right” and blaze the path for the rest of the financial world to follow.
After four years, INX has recently been granted two licenses - both world’s firsts. INX is now SEC-approved to trade cryptocurrencies (Bitcoin, Ethereum etc.). and FINRA-approved (Financial Industry Regulatory Authority) to issue digital tokens as securities for raising capital and facilitate trade. With remarkable achievements, INX is poised to become one of the top ten blockchain-based regulated trading platforms in the next five years.
There has been a push for all crypto exchanges to self-regulate as it is today, as it may offer a way out for exchanges to ‘clean’ some of the past activity on their platforms. But it will take time until mass regulation and compliance are possible for these exchanges simply because many governments worldwide are still grappling with understanding and accommodating cryptocurrency within existing legal frameworks.
To raise capital, companies mainly have two types of financing - equity financing and debt financing. Most companies use a combination of debt and equity along their lifecycle. The downside of debt is that debt must repaid and raising capital via equity - dilutes the existing shareholders. INX is the first to introduce security tokens as a new, regulated asset class of securities enabling raising capital that is both non-dilutive and does not have to be paid back like bonds.
The legacy asset classes such as debt date back to 3,000 BCE, followed by equities that were introduced by the Dutch around 1600. Now, INX has enabled the next step in global capital markets - Crypto-as-a-Security.
INX is currently the only licensed company to drive what can become the world’s NASDAQ 2.0.Moreover, their recent listing on the Canadian exchange (NEO) opens a bridge for both crypto players and traditional institutional investors to benefit from the early-days valuations of INX and bet on their future potential success as one of the top trading platforms to be.
2022 will be the year of crypto regulation, which will ultimately lead to crypto exchanges either shifting and complying with the anticipated mass changes or shutting down and ceasing to operate. With the regulators, INX has laid the groundwork to fuel revenue growth and profitability via the world’s first regulated trading platform for digital assets and are well-positioned to take a significant market share of this multi trillion-dollar opportunity.