Today, MERJ, a national securities exchange based in the Seychelles, has announced the launch of their IPO. This event will see the company raise up to $4 million, in an effort to aid their continued development and expansion of services.
First off the Line
What makes this event unique is that they are the first off-the-line. Meaning that no one before them has offered equity through an IPO in the form of security tokens.
This move marks a major step forward for, not only, MERJ, but the digital securities sector as a whole, as it represents what many have been working towards. One of the main reasons that companies are working towards this, which is touched on by MERJ in their release, is the ability to offer new opportunities to investors; Opportunities that would, in the past, be inaccessible. Beyond simple accessibility, token holders stand to benefit from eventual liquidity through secondary markets – also something quite scarce with regards to traditional securities.
By raising funds in this manner, MERJ is ‘practicing what they preach’. The company has long touted their belief in the benefits of digital securities, and is now putting their money where their mouth is.
Upon announcing the launch of their IPO, MERJ provided the following description of the event.
“The offering is now open to investors from across the globe through the exchange’s own portal, as well as through collaborations with US broker-dealer Jumpstart, US custodian Prime Trust and London based blockchain provider Globacap. MERJ is issuing 1,652,893 new shares at a price of $2.42 per share, raising $4M of expansion capital. The exchange’s tokenized security uses the ethereum public blockchain whilst also being listed on MERJ’s stock exchange and denominated in U.S. dollars, providing investors a secure and familiar way to gain exposure to the growing digital asset industry.”
MERJ CEO, Ed Tuohy, also took the time to comment on this announcement by stating,
“These novel financial instruments are here to reshape the financial industry for years to come…MERJ provides the regulatory framework necessary for investors globally to access these markets in a safe and compliant manner.”
Speaking with Ed
We recently had the pleasure of completing an exclusive interview with the CEO of MERJ, Ed Tuohy. In this interview we discuss both the origins of MERJ, and where they see themselves in the future.
Based in the Republic of Seychelles, MERJ is a securities exchange that has been in operation since a rebranding in 2011. As their name implies, the team at MERJ has made it their mission to ‘merge’ traditional finance with tomorrow’s technologies.
In Other News
MERJ has been on a tear lately, as they have announced their intended expansion into, not only Europe, but the United States as well. The following articles take a closer look at each of these announcements.
DX.Exchange Ceases Operations while Looking for Merger/Sale
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.
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.
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.”
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.
UBS Managing Director Oi Yee Choo Becomes iSTOX CCO
This week, the Singapore-based digital securities exchange iSTOX announced the appointment of Oi Yee Choo as the firm’s new Chief Commercial Officer (CCO). The maneuver follows the larger trend of tokenization platforms hiring from traditional financial institutions over the last year. Additionally, iSTOX gains significant stature with the decision as Choo garnishes much respect in the Singapore market.
Oi Yee Choo
Notably, Oi Yee Choo has over 20 years of experience in the region. Her accolades most recently include a stent as the Managing Director of UBS. Here, the talented Choo was responsible for the firm’s Singapore investment strategy.
It’s precisely this experience that makes Choo the perfect fit for the iSTOX platform. Importantly, the firm recently became a part of the Monetary Authority of Singapore‘s (MAS) Fintech Regulatory Sandbox. The MAS sandbox allows Fintech Companies to test innovative financial products and concepts in a safe and more efficient manner.
Oi Yee Choo
Discussing the decision to join iSTOX, Choo explained the inevitability of a shift in the financial markets. She took a moment to speak on the pro-blockchain stance of Singapore, and why iSTOX’s positioning in the space makes them uniquely prepared for the upcoming digital revolution.
Oi Yee Choo – A Deep Understanding of the Market
Additionally, iSTOX Co-Founder, Darius Liu shed some light on the firm’s next moves after the appointment. He explained that the company needed someone with the reputation and experience of Choo. iSTOX needed an individual with a deep understanding of the nuances of the Singapore securities market.
Also, the company wanted someone with relationships across Singapore’s financial networks. Choo provided all of these features. Liu went on to say that Choo possessed all of these traits, plus she has a deep institutional understanding of the challenges faced by issuers and investors.
The iSTOX digital exchange utilizes cutting edge technology, such as blockchain, to streamline the issuance, trading, and management of digital securities. The company is at the forefront of the tokenization sector in the region.
Series A Funding
As previously reported, iSTOX completed Series A funding earlier in the month. Importantly, company officials decided it was a smart strategy to not disclose the amounts of funds invested publicly. However, the company did acknowledge that the Kiatnakin Phatra Financial Group (KKP) was the only investor needed to meet the company’s crowdfunding goals.
iSTOX – First Regulated Exchange for Digital Securities in Asia
iSTOX seeks to be the first regulated digital securities exchange in Asia. As such, the firm would hold tremendous power in future market developments in the region. As part of this strategy, iSTOX developers want to create an all-inclusive blockchain ecosystem.
iSTOX – Moving Forward
iSTOX continues to make headlines for its pro-regulatory stance in the market. The firm is set to be a major player in the Singapore securities sector moving forward. There is no doubt that Choo’s two decades of experience and network will play a critical role in the company’s future.
Poloniex Branches out from Circle as ‘Polo Digital Assets’
Unfortunately, and unsurprising as Poloniex is U.S. based, the exchange’s customer base within the States will see future access to their services revoked. While this is unfortunate, it is a necessary stance being taken by such companies, due to the regulatory climate within the U.S., to date.
While not nation-wide, rival exchange, Bittrex, recently restricted access to their services for customers living in the state of New York. With the exiting of both of these exchanges from U.S. markets, there now remains a woefully thin selection of North American based exchanges for crypto enthusiasts to trade on.
While U.S. based customers may be losing access to services, this move actually represents an expansion of services for Poloniex, themselves, as they will now focus on global dominance.
Circle has indicated that an outside investment group has already earmarked $100M for infusion into services provided by Poloniex.
The team at Poloniex released a statement of their own, separate from Circle, elaborating on their future intentions. In an effort to bring an air of positivity and reassurance around the announcement, the team stated,
“Going forward, we have a multiyear plan to spend more than $100M to develop and expand Poloniex, and we are very excited to continue working with the amazing global community of Poloniex customers. The cryptocurrency revolution has just begun, and we’re in it for the long haul.”
There have been reports that the outside investment group, which is based out of Asia, is being led by TRON founder Justin Sun. This, however, has not been confirmed at this time, and is just conjecture.
While the driving factors (U.S. regulatory compliance) resulting in the development discussed here today are known issues, the move remained a surprise, due to the timing.
Poloniex was acquired by Circle in a high-profile move, a mere 18 months ago. This acquisition came in to the tune of $440M. While Circle did, indeed, help Poloniex expand services and rebuild a tarnished reputation, most expected a longer time frame of ownership for such an acquisition.
Despite the change of plans, Circle has not wavered in their belief of digital securities. Many believe that the initial intent of the purchase was to see Poloniex act as a secondary market, supporting digital securities distributed through the SeedInvest platform.
Change of Plans
While their approach to the sector may have changed, Circle is still eyeing digital securities as the future, and has indicated that their efforts, moving forward, will be more focused on SeedInvest.
Circle indicates that the following points of interest will also see a ramp up in development as the company looks to develop real-world use cases.
As one of the most successful crowdfunding platforms in the U.S., SeedInvest has the potential to provide Circle with an effective inroads to establishing themselves within digital securities sector.
The platform, which was acquired by Circle in early 2019, has helped a plethora of companies generate crucial funding, to date. Circle indicates that it is their goal to eliminate the divide between traditional finance and blockchain. By marrying the two, they hope to democratize investing, by opening new opportunities to investors of any ilk.
Upon making their announcement, a joint statement was released by Circle Cofounders, Jeremy Allaire and Sean Neville. This statement addressed the rationality behind this move, and how it will help Poloniex mature.
“In an effort to create a competitive internationally-focused cryptocurrency exchange, the Poloniex team and leadership are spinning out from Circle into a new independent international company, Polo Digital Assets, Ltd. Backed by an Asian investment group, the spin-out will bring significant resources and freedom to deliver the product features and marketing strategies needed to be competitive.”
The pair elaborated on their plans moving forward, and the role that SeedInvest will play in them.
“Earlier this year we completed the acquisition of SeedInvest, the largest equity crowdfunding platform in the United States, and have helped hundreds of companies raise hundreds of millions of dollars with internet-based securities offerings. Our plan with this business is to transform how companies raise capital, and open up investment opportunities to people everywhere. We have been working hard to introduce new services built on SeedInvest that allow for fundraising using tokens and digital assets, marrying traditional financial contracts and assets with crypto.”
Operating out of Delaware, Poloniex is a popular cryptocurrency exchange, which was founded in 2014.
CEO, Tristan D’Agosta, currently oversees company operations.
Circle is a Boston based company, which was founded in 2013. Above all, the team behind Circle is working towards developing a transparent and globally accessible financial system.
CEO, Jeremy Allaire, currently oversees company operations.