How INX is building the future of crypto with regulation by design
June 2023 is a period to forget in the crypto community as the Securities and Exchange Commission (SEC) launched perhaps the greatest offensive against leading crypto exchange Binance. A day after one of the world’s largest crypto exchanges was accused of securities violations and a few other charges, Coinbase also came under SEC’s radar.
These trends caused many enthusiasts and investors to question crypto’s future. Consequently, some of the world’s most popular coins suffered massive dips. The BNB token dropped by 16%. Solana and Polygon plunged by 18% respectively. Filecon also dipped by 19%.
Why crypto regulation is a must-have
Like AI and other fast-growing technologies, crypto requires regulatory oversight to protect the finance sector from the risks of illicit crypto operations. When crypto first emerged, there wasn’t much emphasis on having a regulatory framework. But given its current status, the need for crypto firms to comply with regulations has skyrocketed.
As mentioned, a regulated crypto space is ideal for investors particularly because they are less likely to encounter fraudulent activities like Ponzi schemes and scams. A 2023 study conducted by the PEW Research Center found that 75% of Americans aren’t convinced about crypto. If every exchange was duly registered and played by the rules, it would boost people’s confidence. This translates into wider adoption.
How INX avoided regulatory drama
Every industry needs regulatory oversight to ensure fair play and growth. Being a nascent space, the crypto field requires laws to protect stakeholders and potential investors. Crypto firms must also comply with regulations. As recent events have shown, the time for regulation is long overdue.
However, one company considered the risks of running an unregistered operation and chose to fulfill all regulatory obligations from the get-go. INX, the first crypto exhchange to be fully regulated, provides users with asset trading services, security tokens trading, and more. INX decided to take the regulation route in 2017 during the initial coin offering (ICO) trend.
But instead of dwelling in the moment, INX decided to do things the right way and that meant collaborating with the SEC to have a legal ICO that generated a whopping $85 million from over 7,000 investors.
Regulatory adherence is key to crypto adoption
Without regulatory control, it just won’t be possible to make crypto a medium of regular use. As Renata Szkoda, INX’s chief financial officer, once said, “Companies must think critically before launching tokens.” The fact that INX stands out at a time when nearly all major crypto companies are under probe underlines that adherence to crypto regulation is vital.
Regulatory compliance is key to the success of the cryptocurrency industry. Adhering to regulatory norms ensures the industry’s continued legality, protects investors, prevents illegal activities, and promotes its integration into the broader financial system. Regulatory success stories like INX lay out how compliance measures help in addressing the complex challenges and risks associated with the rapidly evolving sector. Without compromising with critical crypto concepts like decentralization, regulatory compliance can be achieved.
It seems that in the near future, only regulated crypto platforms will continue to thrive. So, it wasn’t really a surprise when Republic offered to acquire INX in a $120 million deal. However, with the pressure increasing every day on major exchanges, INX becomes exponentially more valuable, and quite possibly, an exclusive acquisition target that would give the large players a shortcut to compliant platforms.
INX’s trajectory and recent milestones
In yet another step towards growth in a challenging crypto landscape, INX recently shared that it collaborated with the Digital Securities Depositary Corporation (DSDC) to pursue the issuance of digital American depositary receipts (ADRs). The collaboration has been regarded in the industry as the next chapter of tokenized financial assets, opening up new avenues for traditional asset investment and wealth creation in a Web3 era.
While the move advances the adoption of Web3, what’s most important to note is that INX is taking this move with regulatory approval. It further testifies to the company’s ability to bring innovation without dragging along regulatory drama.
To further demonstrate its optimism towards the future, INX has also announced a stock buyback program. Companies sometimes repurchase their shares because they believe that they’re undervalued on the market. Other times, it is done to prevent a hostile takeover attempt. For INX, however, the NCIB and token repurchase initiative seems to signify confidence in its current state and tremendous faith in its prospects, which makes sense given recent events in the crypto world.
Given its Q2 2023 financial results, INX seems to be advancing quickly. The company closed the quarter with a total revenue of $1.6 million, representing an 161% increase compared to its revenue for Q2 of 2022. It also recorded a 50.1% rise in fresh customer registrations from the previous quarter. In other words, the market seems to be rewarding INX’s unique approach to crypto-compliance and regulation by design.
Final thoughts
Regulatory compliance is key to the success of the cryptocurrency industry. Adhering to regulatory norms ensures its legality, protects investors, prevents illegal activities, and promotes its integration into the broader financial system. Regulatory success stories like INX’s show how compliance measures help in addressing the complex challenges and risks associated with the rapidly evolving crypto sector. As the regulatory crackdown on major crypto players continues, INX seems well positioned to either grow or become a valuable acquisition target.
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