Israeli cryptocurrency company INX Ltd., controlled by Shy Datika, notified the US Securities and Exchange Commission (SEC) on Friday that it would launch a roadshow in January 2020 in which it would propose to investors participation in an initial offering of its digital currency, INX Security Token.
A security token is a digital currency subject to securities law in the country in which it is issued, and INX's offering will therefore be conducted in the same way as an initial public offering of securities. This is the first time that the SEC has permitted a company to raise capital from the public through an offering of a digital asset rather than of shares or bonds.
INX plans to sell 130 million INX Security Tokens at $0.65-1.15 per token, which means that if the offering is successful, the company will raise $84-150 million. The offering will not go ahead unless it raises at least $5 million.
The company says that the tokens will not be offered for sale or for trading until approval is obtained from the SEC for listing them as securities, and that at this stage it does not know where they will be listed.
INX says that the proceeds of the token offering will be used to continue development of its platform for regulated trading in blockchain assets, such as cryptographic currencies (like bitcoin), security tokens, and derivatives of these digital currencies, and also for the purpose of setting up a cash reserve for the trading platform and to finance its activities.
INX was founded and registered as a privately-held company in Gibraltar in 2017 by a group of Israeli entrepreneurs led by Shy Datika, who is president of the company. On its board are American and Israeli businesspeople with experience in finance, technology and blockchain, among them David Weild, a former vice chairman of Nasdaq, and Alan Silbert, a former vice president of GE Capital.
Most of INX's senior management and all of its research and development activity are currently located in Israel. In its SEC filing the company states that "After the INX Digital trading platform becomes fully operational, INX Limited intends to relocate its principal office to the United States."
The main shareholder in INX is Triple-V, a company owned by Datika, which holds 29.4% of the shares. In 2012, Datika, who serves as an external director on the board of Althshuler Shaham Provident Funds and Pensions, sold foreign exchange trading company ILSB to Leader Capital Markets, following which Datika became vice president for business development at Leader, a role he left after eighteen months.
Other shareholders in INX are Yitshak Rafaeli, who owns 16.1%, Doron Cohen, who owns 10.2% through consultancy company A-Labs Finance and Advisory Ltd., Riccardo Spagni, with 7.8%, and Meni Benish, with 6.4%. According to the prospectus filed with the SEC, Datika holds 9.4 million INX Tokens, Cohen holds 4.6 million, and Rafaeli holds 293,000.
Published by Globes, Israel business news - en.globes.co.il - on December 23, 2019
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