With the launch of the new Bitfinex Securities trading platform, the Bitfinex cryptocurrency exchange enters the traditional financial sector.
Bitfinex securities will enable small and medium-sized businesses to list and raise funds for their tokenized stocks, bonds or funds. In return, Bitfinex Securities customers can invest in and trade in tokenized securities.
This product differs from the stock token trading provided by cryptocurrency exchanges such as FTX and Bittrex Global. This is because these two exchanges are listing stock tokens that have been made public. On the other hand, Bitfinex Securities lists the stocks, bonds or funds of private companies that want to be listed through tokenization.
“We are basically trying to eat the lunch of London Stock Exchange and other traditional stock exchanges,” Bitfinex Securities CTO Paolo Ardoino told The Block in an interview.”
Located in Kazakhstan
Bitfinex Securities stated that it is located in Astana, Kazakhstan and is regulated by the Astana International Financial Center (AIFC) Authority. However, Tim Aron, Bitfinex’s Head of Securities Compliance, said in an interview that the exchange currently has a conditional investment exchange license issued by the agency. A conditional license means that Bitfinex Securities operates in a sandbox environment until a full license is obtained.
“We will operate in a very controlled environment,” said Aron. “We have to limit the amount of capital raises at $15 million and the maximum number of customers at 1,000.”
Ardoino said these restrictions are global and not specific to each issuer. That means that if Bitfinex Securities runs three funding rounds of $5 million each, it will hit the cap.
Ardoino stated that these restrictions will be “lifted soon” once we have confirmed with the regulator that the first refill is going well and once a full license is in place.
When asked why Bitfinex Securities chose to build and maintain a license in Astana, a relatively little-known jurisdiction, Ardoino said Astana is becoming one of Asia’s financial metropolises and has a foundation based on the UK system of procedures , Dubai and Abu Dhabi. “We have worked hard for the past year and a half to get this license,” said Ardoino.
Like its crypto trading platform, Bitfinex’s securities platform is not suitable for residents of the United States and other prohibited jurisdictions. Citizens of Canada, Switzerland, Venezuela, Austria and Italy are also on Bitfinex Securities’ list of prohibited persons.
Aron said those who can trade on the platform need to complete the review and know your customer process (KYC).
Aron said that both retail and qualified investors can trade Bitfinex securities, but retail investors can only participate in the issuance of companies that have issued financing prospectuses.