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Hassans assists in the first ever IPO of a security token registered with the U.S. Securities and Exchange Commission.

Hassans International Law Firm Limited is delighted to have been involved with and assisted INX in setting up the first ever Initial Public Offering (‘IPO’) of a security token registered with the U.S. Securities and Exchange Commission (‘the SEC’). The first IPO (not ICO, or initial coin offering, which is the nomenclature for the issue of utility tokens as opposed to security tokens) structured through Gibraltar is the culmination of a process which INX embarked upon, with Hassans, around two years ago. INX filed a draft F-1 form with the SEC initially back in January 2018 and has been engaged in a lengthy, often arduous process of dealing with queries and requests for further information from the SEC over the last two years. There have been nine rounds of feedback during which the project has come under heavy scrutiny, focusing in part on the reasons why INX chose Gibraltar as the jurisdiction and, further, the provision of extensive feedback in relation to Gibraltar law.

Aaron Payas, Partner at Hassans who led on the INX project from its inception said:

“I am thrilled that we have been able to secure this confirmation from the SEC. This represents something of a watershed moment, not just for Gibraltar as a jurisdiction which took the initiative and seized the opportunity of the distributed ledger technology and wider fintech space, but also for the industry as a whole. The SEC has been robust in its approach to cryptocurrency, taking a wide view of the definition of security to largely include utility tokens, thereby making the offer of such virtual assets in the US subject to the very substantial body of securities law and practice there. Some projects opted to enter the US market by relying on exemptions and, in respect of those who didn’t, or did not properly do so, the SEC has issued a record number of subpoenas. Unregistered token offerings have quickly come under fire of the SEC’s traditional heavy handedness in respect of many of the hundreds of token offerings seen during the 2017 boom. There have been numerous examples of settlements entered into with the SEC or outright bans being doled out by it.

The approach by INX to its own fundraising has been in stark contrast to the many ICOs we have seen in Gibraltar and elsewhere which have tended to actively seek to avoid falling in scope of US securities legislation by means, often, of excluding US investors. INX understands its market and knows that its success is inextricably linked to being able to access investors/customers in the US. It therefore took the decision to develop and deploy a security token and to work with the SEC to develop the project in full compliance with the relevant securities provisions.”

Mr Payas continued:

“It is a matter of some pride for Hassans, INX and for Gibraltar that the first security token offering approved by the SEC for distribution to the US public isn’t even a US entity – it is a Gibraltar company, constituted and operating under the Laws of Gibraltar. This is an excellent development for the jurisdiction, the efforts of which in the DLT and wider fintech space are being validated by the successful filing of the INX security token – making a public offering of tokens in the US had long been the ambition of many projects in the industry, something that was thought by many to be impossible. We now know, as a firm, that it is not.”

Mr Payas concluded:

“We are looking forward to continuing to work with INX on this project as it moves towards the next phase of its development – the fundraise. We are delighted to be a part of this development and look forward to working with others hoping to emulate the success of INX.”

 Gibraltar continues to see a growing interest in the jurisdiction as a centre of excellence for blockchain business. The DLT Licensing regime rolled out in January 2018 under the Financial Services (Distributed Ledger Technology Providers) Regulations 2017 has developed, with the experience of the dozens of applications received since then (including the initial rush of applications from entities which sought to take advantage of the grandfathering rights afforded by the DLT Regulations) into an established and well-understood licensing regime where the expertise of the advisors and the regulators themselves is helping applicants achieve results faster and more efficiently than ever before. The legal, fiscal and regulatory certainty afforded by Gibraltar in the context of cryptocurrency, allied to the continued UK market access available to Gibraltar-based operators in financial services, ensures Gibraltar remains a compelling proposition for DLT business.

On working with Hassans, Shy Datika, Co-Founder and President of INX, commented:

 “Our vision for INX and the INX Token required a solid foundation of regulatory clarity for security tokens and cryptocurrencies.  With the regulatory construct of Gibraltar and the expert guidance of Hassans we were able to make our vision a reality.”

For any media/client enquiries relating to this announcement, please contact Aaron Payas, CFA by email at