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DX.Exchange Goes Bankrupt – CX Technologies Ltd

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DX.Exchange Goes Bankrupt - CX Technologies Ltd
The Estonia-registered crypto exchange, DX.Exchange announced that the company had begun bankruptcy proceedings. The news was somewhat expected after the company closed its doors just a few weeks earlier due to a petition filed against the firm by employees awaiting payroll. Company officials say they have no money left in their bank accounts. Now, a slew of workers and business affiliates await court proceedings.

Bankruptcy Petition

The official bankruptcy petition filed on Oct. 24 alleged that the DX.Exchange owed 78 former employees payroll for the months of September and October. These employees included a variety of workers from CX Technologies Ltd., the company behind DX.Exchange. The petition sought to have the exchange dissolved by an Israeli court.

Unpaid Suppliers

Additionally, a host of suppliers have taken suit against the company. These suits run the gambit from unpaid bills to the alleged fraud. The well-known cybersecurity firm, White Hat Ltd is one of the company’s claiming losses due to DX.Exchange actions. Another lawsuit lists Bee2See Dotan B.S. Solutions. This is the firm that handled DX.Exchange targeted marketing. Even the company supplying the servers never got paid – Malam Team.

Writing on the Wall – DX.Exchange

Employees and suppliers knew to take action earlier in the month after the firm closed its doors unexpectedly. At the time, DX.Exchange owner Pinhas Patarkazishvili cited the rising costs and dwindled profits the exchange had left. He told employees that he was searching for a merger or acquisition and if that he was unsuccessful, the company would permanently cease operations.

DX.Exchange

The much-hyped DX.Exchange promised to deliver an efficient trading experience on the blockchain. The company planned to trade all types of cryptocurrency including security tokens. According to the company’s documents, the exchange had agreements to list some big-name tokenized securities such as Tesla and Apple stock.
DX.Exchange
DX.Exchange

Security Tokens on the DX.Exchange

When questioned about the security token aspect of the exchange specifically in a recent interview, DX. Exchange CEO, Daniel Skowronski explained that the company applied for an MTF (multilateral trading facility) exchange license under a different entity but never completed the requirements prior to filing for bankruptcy.

Shady Dealings

Interestingly, this story goes much deeper. Apparently, it was reported that Limor Patarkazishvili (DX.Exchange owner’s wife) was the sole owner of another firm that was raided by the FBI in 2018. The company, SpotOption, allegedly was a major player in a large international binary options scam. When investigators delved deeper, they discovered that both companies shared staff.
At first, the DX.Exchange denied any involvement in SpotOption. Eventually, it came to light that Limor Patarkazishvili was the main shareholder in the firm. She owed 99 percent of the shares. This discovery only fueled speculation that the couple wanted to skip out on their past-due payments.

Will Employees and Affiliates Get Paid?

Skowronski publicly claimed that his company is not in “an exit scam.” Unfortunately, this was right before the company closed its doors. For now, the holidays could be bumpy for employees of the DX.Exchange as they attempt to cope with the financial losses.
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David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

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VNX Exchange Launches, Calling Luxembourg Home

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Platform Launch

While there are many hurdles yet to be cleared on the way to the mainstream adoption of digital securities, there is one that remains obvious. This would be a lack of marketplace solutions within the sector.

Marketplace solutions are vital, as they are what will provide industry participants with the promised, and anticipated, liquidity often associated with tokenized assets.

Looking to fill this void in the sector is VNX exchange. The Luxembourg based company has just announced the launch of their digital assets issuance platform, which will work to facilitate the tokenization and sale of assets.  VNX indicates that the potential for a secondary market launch will be evaluated in time.

In an event held to mark the launch of the platform, the company even drew praise from the Luxembourg Minister of Finance, Pierre Gramegna. He stated,

“VNX is one of the success stories of Luxembourg House of Financial Technology, the LHoFT”

A Place to call Home

For those that follow the digital securities sector, a geographical trend may have been noted. With forward thinking regulations, and industry clarity, Luxembourg has begun to establish themselves as a nation open to blockchain based endeavours. This has resulted in more than just VNX calling the European nation home. The following companies are just a couple of examples of this.

Competitors

While the VNX launch is a positive development for the sector, they are not the first to the table, and will not be the last. The following companies stand to be a two of the major competitors in the same space in which VNX is looking to carve out a place.

Hot Start

Wasting no time in the launch of their services, VNX is providing investors with access to an STO straight out of the gate.

This event will see Korean based, Streami, issue €3 million worth of digital securities. The company itself is solution provider within the world of blockchain through services ranging from a cryptocurrency exchange, to custody, and fiat gateways.

The event garnered commentary from representatives of each, VNX and Streami.

Alexander Tkachenko, CEO of VNX Exchange, stated,

“Streami offering demonstrates the real use case of asset backed tokens to finance VC investments.”

Junhaeng Lee, CEO of Streami, stated,

“I strongly believe in the development of the assets-backed digital financial instruments. VNX offering shows how fundraising for VC industry may evolve and by extension implications to the financial industry. I am very excited and proud that Streami is the first offering presented at VNX platform.”

To learn more about the structuring of these digital securities, make sure to peruse the Streami investor deck HERE.

VNX Exchange

While first conceived in 2017, VNX exchange was founded in 2018. The company operates within Luxembourg, and hopes to transform FinTech through their platform.

CEO, Alexander Tkachenko, currently oversees company operations.

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Tokai Tokyo Financial Holdings to Bring Digital Securities to Japan

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Japanese Expansion

After spending months developing within the confines of the MAS FinTech Sandbox, digital exchange, ‘iSTOX’, looks to take its first large step forward – towards Japan.

It was recently

announced that Japan based, Tokai Tokyo Financial Holdings, has acquired a minority share of ICHX Tech (iSTOX ‘mother-company’).

This move represents a first for iSTOX, as the company looks to eventually offer their services to investors worldwide.

Investment Details

iSTOX has had a successful year, as they have been on the receiving end of various investments over this time. The first major example would be the globally renowned, Singapore Exchange (SGX), followed by a series of companies in the following months.

SGX Invests in iSTOX to Develop Security Token Platform

iSTOX Exchange Completes Series A Funding

This latest investment, which totals $4.58M, equates to a 4.58% share in ICHX Tech. By acquiring the position, it is expected that digital securities, hosted on the iSTOX platform, will now be available to Japanese investors; this being possible through the brokerage capabilities of Tokai Tokyo Financial Holdings.

MAS FinTech SandBox

One of the reasons behind the success experienced thus far by iSTOX, can be owed to the fact that they are one of a very select group to be admitted into the Monetary Authority of Singapore (MAS) FinTech Sandbox.

This program allows for companies to trial new technologies and products, within a structured environment, allowing for continued public/client protective measures.

MAS FinTech Sandbox Welcomes Capital Markets Platform ‘iSTOX’

iSTOX

iSTOX is a subsidiary of Singapore based, ICHX Tech, which was founded in 2017. The company is fervently working to develop, and attain, adoption for their digital securities exchange. This platform, which is currently operative and accessible by accredited investors, is expected to make a full launch in Q4 of 2019.

CEO, Danny Toe, currently oversees company operations.

The team at iSTOX recently announced new growth, as they welcomed a new CCO – Oi Yee Choo. The following article takes a closer look Oi Yee Choo and what she brings to the table.

UBS Managing Director Oi Yee Choo Becomes iSTOX CCO

Tokai Tokyo

Operating out of Tokyo, Japan, Tokai Tokyo Financial Holdings is an investment firm, which was founded in 1929. The company is able to offer its clientele a variety of services, pertinent to securities, such as brokerage, distribution, and more.

Company operations are currently overseen by CEO, Tateaki Ishida.

In Other News

Singapore has rapidly established themselves as a leader within digital securities. With clear regulation, and forward thinking, companies have been able to effectively establish themselves within the Asian nation. The following articles are a few examples, highlighting industry moves which involve Singapore.

1X Launches as First Licenced Private Securities Exchange in Singapore

Propine Accepted into MAS FinTech Sandbox

Singapore Halts STO for Regulatory Breach

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DX.Exchange Ceases Operations while Looking for Merger/Sale

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DX.Exchange Shuts Down

In a surprise move, DX.Exchange has announced that they are immediately ceasing operations. While customers will remain able to withdraw funds, they indicate that all trading and deposits will be halted.

For a company that endured quite an arduous journey to established what they have, this is a disheartening development to see a unique exchange shutter before the digital securities sector even takes off.

Permanent or Temporary?

While the ceasing of operations is immediate, it does not necessarily mean that the exchange is gone forever. DX.Exchange has indicated that they are actively looking to, either sell the company, or facilitate a merger.

While this would be a best-case scenario at this point, there remains a real possibility that DX.Exchange will not open their doors again. With this possibility remaining, the DX.Exchange team has indicated that they are ready to take the appropriate steps necessary, should permanent closure be the final outcome.

A Unique Approach

The exchange caught the attention of many when they first launched, due to their unique approach towards digital securities. Rather than supporting simple security tokens, the team at DX.Exchange decided to tokenize publically traded securities. While this approach drew criticisms from many, it was a unique one that opened doors to new forms of investment.

DX.Exchange to Tokenize Publically Traded Securities

Hurdles and Scares

This development shouldn’t come as a huge surprise, as the exchange has consistently dealt with various hurdles and scares, in their short time. Examples of this include a delayed launch, compromised security, liquidity issues, and more.

Over the course of their short time being in operations, we have detailed a few of these issues.

DX.Exchange to Support Secondary Markets and Issue Security Token

Digital Securities Platform DX.Exchange Survives First Week Scare

Commentary

The team at the exchange made the announcement of their closure through their blog on Nov. 3, 2019. In this statement the team had the following to say on the matter.

“We must inform the community that the board of directors of DX.Exchange has decided to temporarily close the exchange as we pursue a merger or outright sell of the company…The costs of providing the required level of security, support and technology is not economically feasible on our own…The board believes this is the best opportunity for DX.Exchange to achieve success for its shareholders and compete in this challenging market. In the event a merger or sell is not completed in a timely matter then the exchange may not resume operations and take appropriate action.”

DX.Exchange

Founded in 2018, DX.Exchange is an Estonian based cryptocurrency exchange. The exchange operates under the oversight of the Estonian Financial Intelligence unit, while utilizing technology developed and provided by NASDAQ.

CEO, Daniel Skowronski, currently oversees company operations.

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