Initial Public Offerings (IPOs) in the cryptocurrency space appears to be the next big thing. Most cryptocurrency companies are now exploring the potential of a public listing in the U.S. INX, a crypto token and asset exchange platform, is joining the fray.
All Systems Set for INX Listing
This week, the Gibraltar-based exchange explained in an amended filing with the United States Securities and Exchange Commission (SEC) that it had secured an underwriter for its forthcoming IPO. The filing showed that the firm had tapped A-Labs Finance and Advisory, a financial services firm based out of Israel.
The filing added that INX had paid A-Labs a $500,000 fee to perform the underwriting tasks. The financial services firm could also make a further $500,000 if INX’s IPO makes more than $10 million in investment. If INX manages to reach the $117 had cap threshold, A-Labs will earn a whopping $8 million in fees.
INX has been making moves towards a possible IPO for about a year. In August 2019, the firm filed a prospectus with the SEC, claiming that it expected to raise between $5 million and $130 million in capital through a forthcoming listing.
The exchange notably claimed that it would not sell any INX tokens until it raised at least $5 million in proceeds within a year. Investors could purchase INX tokens with Bitcoin or Ether, with INX claiming that it would use the funds to establish a security token and two trading platforms wholly operated by two of its subsidiaries.
The filing explained that the firm had planned to issue its INX tokens to investors, who would have to put up at least $1,000 to participate in the capital raise. However, this week’s filing points out that A-Labs had agreed to manage INX’s IPO since September 2017. Over the past three years, the financial services company has managed to purchase up to 10 percent of all INX common stock.
The Crypto IPO Craze
INX’s potential IPO is coming amid a flurry of interest in public listings from the crypto industry. At the World Economic Forum earlier this year, Brad Garlinghouse, the chief executive of San Francisco-based blockchain giant Ripple Labs, said that the company could go public this year.
“In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side… it’s a natural evolution for our company,” he explained in part.
Last month, Barry Silbert, the CEO of institutional investment group Grayscale Investments, corroborated the point. In a tweet, he explained that more crypto companies would go public in 2020, adding that several special-purpose acquisition companies (SPACs) had approached him with merger ideas.
For now, however, the most notable company that has made IPO indications is the top crypto exchange Coinbase. Reuters reported last month that the company was planning a public listing either at the end of the year or early in 2021.
As the news medium explained, Coinbase was keeping its plans fluid in the interim. However, the firm had been speaking with investment banks and law firms to help in the listing process. Coinbase is reportedly favoring a direct listing, which would help it start public trading without pricing its equity through a bloc sale.