Since initial coin offerings (ICOs) have become too controversial for mainstream investors, the crypto sector has come up with new offerings. These are security token offerings (STO). The difference between an STO and an ICO is simply regulations. In this view, Lykke partners Nxchange will launch Europe’s first trading platform for the digital assets.
An official statement reveals that the partnership will establish a fully compliant tokenized securities exchange. This will be the first facility of its kind in a time that most of the world is still unsure about the cryptocurrency sector.
Safe and regulated trading
Per the statement, the partnership forms a symbiotic relationship that will benefit both companies. In particular, part of the agreement enables Lykke to own equity in Nxchange. In return, Lykke will contribute a variety of resources to the joint venture that will help towards regional expansion.
As per the news release, the resources include investment capital and crypto asset trading infrastructure. Further, Lykke will extend its financial engineering expertise to the joint venture.
On the other hand, the partnership will benefit from Nxchange’s regulatory expertise in compliance and governance. This expertise will be important in terms of listing requirements. Ultimately, the aim is to facilitate safe and regulated trading.
Nxchange to bring the benefits of blockchain to investors
Regulatory compliance is a necessity for any firm looking to do serious business in Europe. Further, it will make it easier for firms to expand their services to a wider investor market beyond the Eurozone. On this front, the partnership is advantageous.
Further, the partnership will avail the proprietary Lykke Nxchange wallet that will offer storage services to the tokenized assets. Through the wallet, users will be able to “access and trade their digital assets on the exchange from anywhere in the world, whenever they wish.”
Interestingly, analysts see the move as a response to Europe’s recent classification of certain digital tokens as securities. As a result, the tokens fall under ESMA’s supervision.
According to Richard Olsen, founder of Lykke, Lykke partners Nxchange to bring the benefits of blockchain to the investor. Further, he notes that they will strive to adhere to available regulations in their quest to serve the new market.