Cryptocurrency exchange, LXDX, has announced that is plans to issue stock through a security token offering.
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LXDX, the cryptocurrency exchange founded by ex SpaceX engineer, Joshua Greenwald, has revealed plans that it will be holding a to issue stock through the company. This latest news comes in the wake of more businesses switching from initial coin offerings (ICOs) to STOs in order to give participants more say in the project as a whole.
As of now, LXDX is the first digital asset exchange which will be able to offer users tokens backed both equity and as a recurring dividend payment. LXDX’s decision to hold an will give its investors more of a say in the businesses overall direction, though only 1,000 participants will be allowed through this first phase. In a press release distributed by the company, Greenwald said that:
“As blockchain technology proliferates, we expect to see increased tokenization of tangible assets like real estate, commodities, and even art. The million token future is just around the corner. We are excited to provide our community a chance to experience the benefits of a true security token.”
The LXDX Corporation has revealed that it plans to issue five million LXDX Tokens at €1 each, all of which are ERC-20 compliant, and will be offered as a security to participants under . This equates to around 10% of the overall business ownership and will give token investors access to 10% of the LXDX exchanges quarterly adjusted revenue.
However, the LXDX token will not yet be free tradeable due to regulatory restrictions regarding securities trading. In the near future, LXDX is expected to allow trading between initial contributors of the through a smart contract similar to that of Bancor. The crypto exchange hopes to have the token listed on secondary markets within the next six months.
Though LXDX may not officially be live as of yet, the currency is operating under military-grade security under former U.S. Navy Cryptologic Technician, Steven Thomas. It is expected to be one of the most secure crypto derivative exchanges on the market and is implementing protocols which will ensure that the company “operates under radical transparency.”
Interesting early investors in LXDX include: Dymon Asia Ventures, Arianna Simpson of Autonomous Partners and Robert S. Murley, Chairman of Investment Banking for the Americas and Vice Chairman of Credit Suisse Securities.
The Texas State Securities Board has issued an emergency cease and desist order to an Australia-based cryptocurrency mining company and its affiliates. According to the order, the company represents that investments in its mining contracts are “guaranteed to 200% profit.”
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Cease and Desist Order
The Texas State Securities Board on Tuesday issued an emergency cease and desist order to Sydney-based Aws Mining Pty. Ltd. and nine other respondents affiliated with the company. The entities named are Automated Web Services Mining (Aws Mining), Mycoindeal, Aws Elite, and West Texas Oilfield Cloud Miners Club.
Sydney-based Mycoindeal provides wallet services for investments issued by Aws Mining. Aws Elite is a multi-level marketing organization for Aws Mining based in Pennsylvania. West Texas Oilfield Cloud Miners Club, an affiliate of Aws Elite, is a Texas-based sales agent for Aws Mining.
The order states:
The investments in the cryptocurrency mining program are ‘securities’ … Respondents are engaging in fraud in connection with the offer for sale of securities … [and] are making offers containing statements that are materially misleading or otherwise likely to deceive the public.
The board elaborated that respondents are violating the Securities Act since neither they nor their securities are registered with the state’s Securities Commissioner.
They are, therefore, ordered to cease and desist from offering for sale any security in Texas until the securities and all parties involved are properly registered or exempt from registration.
200 Percent Return Guaranteed
According to the order, Aws Mining’s website claims that the company is mining cryptocurrency through farms located in Guangzhou, China; Ingushetia, Russia; Ciudad del Este, Paraguay; Anhui, China; and Hebei, China.
The order describes that the companies and their executives “are issuing investments in cryptocurrency mining referred to as crypto mining power contracts, and they are representing [that] the crypto mining power contracts are ‘guaranteed to 200% profit’ and that each crypto mining power contract ‘is guaranteed to 200% return on purchase price.’”
In addition, the companies are using a multi-level marketing network of sales agents to sell these mining contracts and recruit new agents on social media. The board emphasized:
They are also telling potential investors the crypto mining power contracts pay a ‘200% passive return on every investment.’
Furthermore, the order noted that “Although potential investors are led to believe they will receive a 200% return on principle invested in crypto mining power contracts,” Aws Mining “is now disclaiming the guarantee of profitability and instead representing that investors assume the risks associated with the investment.”
The board subsequently concluded that the companies and individuals named in the order “are engaging in other illegal, fraudulent, deceptive, and/or misleading practices in connection with the offer of crypto mining power contracts to Texas residents.”
What do you think of Texas taking action against Aws Mining? Let us know in the comments section below.
Images courtesy of Shutterstock and Texas State Securities Board.
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