LDXG Limited has announced the arrival of its STO (Security Token Offering) for high profile investors.
LDX is an FCA-approved trading platform which offers a wide range of services in both traditional and digital financial derivatives markets. With the aim of meeting customer needs whilst providing simplicity and cost reduction, the company launched its first STO and added this product to its range of services.
The capital raised will be used to accelerate the expansion of the company, which is divided into two businesses: LDX Exchange and LDXA Limited (“LDXA”). The latter provides consulting, marketing and administrative services to customers.
This STO will launch 6 million tokens, each worth $1 for a total capital of $6 million. The LDXG tokens allow investors to share the group’s revenues and will be held in a secure deposit with HEX Trust Limited (‘HEX Trust’). Further details will be provided to investors who request information about this product. LDXG tokens are only available to qualified investors.
The aim is to expand services in the UK, EU, Asia and Eastern Europe. CEO Vj Angelo said he was pleased with the launch of the company’s first security token and was confident that this methodology for raising funds would be successful.
LDXG is certainly not the first in the UK to launch an STO, a few days ago Summer Global (SGH) also announced its token sale for the issuance of SGHX on the London Stock Market.
STOs, what are they?
If 2017 was the year of the ICO boom, two new types of token sales are now emerging.
The success of IEOs, thanks to the efforts of the most important exchanges, is well known. However, STOs are also increasingly gaining ground. The main difference is that while an ICO may refer to fundraising through the sale of any type of cryptocurrency to obtain a utility token, an STO refers specifically to the sale of a security token.
Security tokens are therefore not ICO-related cryptocurrencies or tokens. They represent the classic financial instruments in digital format. Their trading is regulated by the specific regulations of each country. Security tokens are considered to be securities and are therefore subject to the relevant regulations.
“Security” therefore means a financial instrument that has a monetary value and can be traded, such as shares, bonds, real estate funds, etc…
A security token performs the same function but the difference is that the ownership of the asset is confirmed through a transaction on the blockchain. Security tokens can offer many rights, such as dividend rights, voting rights and much more.
An STO is extremely effective for companies wishing to raise money through the sale of tokens, considered as financial instruments, using the blockchain.
The real growth of STOs began in Q1 2019 with a +130% increase over the previous year (figure: Inwara). In the first three months of the current year, approximately $122 million was raised.