INX Limited, which operates the first security token IPO cleared by the US regulators, is set to acquire Openfinance Securities, the broker-dealer and ATS behind the Openfinance digital securities trading platform.
INX president and founder, Shy Datika told Reuters that Openfinance raised $25 million since 2017 which puts the company at a valuation range between $40 million to $70 million. However, he did not disclose the exact terms of the deal.
Subject to regulatory approvals and other closing conditions, INX would purchase 100% of Openfinance’s broker-dealer and its alternative trading system (ATS), which facilitates transactions in securities that are not publicly-traded. The deal also includes its systems, digital asset listings, client base and licenses.
Based in Chicago with offices in New York and Pennsylvania, Openfinance offering is a clearing and settlement platform based on the blockchain that lets companies raise capital with security tokens. Additionally, it provides secondary market liquidity for ICO tokens that are offered and sold as securities.
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The platform is available to both accredited and non-accredited investors to trade these assets 24 hours a day and seven days a week. Further, it manages the entire lifecycle of blockchain-based digital assets, including origination, issuance, exchange, settlement, and redemption. Its client roster includes banks, brokerage houses, custodians, and transfer agents serving the alternative markets.
Commenting on the deal, Openfinance CEO, Jim Stonebridge stated that “INX and Openfinance share the same vision of providing a safe and regulated ecosystem for listing and trading of digital assets. We believe that regulatory oversight, combined with liquidity, will make digital assets the financial instrument of choice for companies and investors seeking to access and raise capital. The consolidation of two leading platforms will be the catalyst needed to move this industry forward.”
The acquisition comes at a time when INX Limited is trying to strengthen its position and regulated activities to win a share of the US crypto market. The Gibraltar-based firm has filed with the Securities and Exchange Commission (SEC) to raise nearly $130 million through an initial public offering (IPO).
In addition, INX Limited is considering plans to launch a crypto derivatives platform for trading futures, options, and swaps. However, this is subject to the SEC’s approval, and it also needs first to secure the broker-dealer license.