Gets funding in a non-usual way
An IPO. Nothing new.
Business: provides services in trading digital assets. It was done already such a business.
Amount: 117 millions US dollars. It was done before, such amount is not unachievable.
So what is new?
SEC (Securities and Exchange Commission)-approved IPO is the first of its kind: investors can pay in Bitcoin (BTC), Ether (ETH), and USD Coin (USDC) – these are crypto-currencies.
Since launching the IPO, INX (the start-up company) raised $7.5 million by Sept. 10, the firm’s representatives said.
More than 3,000 retail and accredited investors registered for the INX token offering in the first three days.
Yes, that’s right. You read it correctly: a token. This is a new form of investment instead of shares or bonds or other equity form.
For those unfamiliar, a token is a form of digital assets that stays on a blockchain (a specific type of distributed databases network), is transferred back and forth over a blockchain and is issued electronically using a smart contract (a piece of software that is a feature of the blockchain).
So, no more need for papers, approvals, stamps, formalities and other similar stuff. Also, no more need for brokers. Investors can trade tokens using digital assests exchanges.
More precisely, this is a hybrid of IPO and security token offering (STO) that is registered with the SEC (a registration statement relating to the offering of these securities was declared effective by the SEC on Aug. 20), allowing everyday investors to legally participate in it.
The funds raised from the sale of INX tokens will be used to launch a multiservice digital asset platform. A regulated crypto trading platform for crypto, security tokens and their derivatives is intended to be created, as well as to launch a cash reserve fund.
STO (Securities Token Offering): Why is this a big deal anyway?
Because crowdfunding in a digital form takes place now in a regulated form.
Why was not regulated so far?
Because innovation was a step ahead of regulatory activities and this is since ever I would say. Blockchain as innovation makes no exception. Yes, the form not regulated was ICO (Initial Coin Offering)
In order to understand what an STO is, one must first understand ICO. The latter refers to a token offering from a company or organization in order to raise capital for a project. Buyers are issued with digital tokens. Unfortunately, ICOs are largely unregulated, thus putting investors at risk.