After Coinbase, Now Diginex Plans to Enlist on Nasdaq

After Coinbase, Now Diginex Plans to Enlist on Nasdaq

Published: August 7th, 2020

 Diginex, a Hong Kong-based startup cryptocurrency exchange operator, has announced plans to list on Nasdaq. The action will take place through a reverse merger with 8i, an investment holding company. The merger will see Equos Exchange, Diginex’s newly-launched subsidiary, become the first cryptocurrency trading exchange to list in the U.S.

Diginex, a blockchain-powered financial services platform, launched a new digital assets exchange called Equos on Saturday, July 30. Because of the planned merger between Diginex and 8i Enterprises Acquisition Corp, a specific intention investment holding company, the company, through its Equos exchange, is on the path of going public in September.

The listing that remained on hold since June has gained the approval of the Securities and Exchange Commission of the U.S. (SEC). It is now up for a vote by the shareholders on September 15.

Richard Byworth, the CEO of Diginex, said that trading on any major U.S. market is a coup for the firm, especially in an industry comprised mostly of private startups that also compete for the global market share in an environment that lacks proper regulation.

Byworth added that the current listing that 8i has on the bourse would become Diginex’s between September 20 and 23. Subsequently, the ticker, JFK, will also change.

The CEO said that the tone of the country as well and that of significant stock markets show that an increasing portion of the cryptocurrency industry is coming to the market. He added that this shift is important because it elevates the industry’s level of credibility and trust.

Delayed Listing

Originally, Diginex was set for listing in March. However, the date was pushed ahead because of the markets’ downturn due to the eruption of coronavirus. As a show of preparation, Diginex hired Chi-Won Yoon, the former chief executive of UBS AG Group as its chairman for Asia in April.

The company’s upcoming listing comes when the cryptocurrency industry is experiencing a bit of an upswing. The week ending Saturday, August 1, saw Bitcoin rise above the $11,000 mark for the first time in 2020.

Even though much of Diginex’s business is in Hong Kong, the newly-acquired cryptocurrency exchange is based in Singapore, where the company has applied for a license. The new platform provides cryptocurrency spot trading as well as other complex derivative products.

Byworth said the acquisition of Equos is pivotal for Diginex ahead of the reverse merger. The planned listing through a merger estimated to be worth $300 million, and its acquisition of a Singapore-based exchange shows its commitment to transparency, compliance, and adherence to the regulations.

Partnerships and Expansion

The listing plans expand the traction of Diginex in the cryptocurrency space. Also, they are in line with the company’s expansion and partnerships program. On July 21, the company announced an extended working relationship with Itiviti, a trading technology firm.

Through the Itiviti partnership, Diginex will leverage the tech firm’s Tbricks solution, which is a modular trading platform. Tbricks provides institutional clients with automated management services in risk, profit, loss, and portfolio management.

Using Tbricks, Diginex will launch Diginex Access, which it touts as an easier way to buy, sell, and trade digital assets. Already, Diginex has leveraged the global order routing network designed by Itiviti.

Equos and the Choice of Singapore

Byworth explained that Diginex is strategic in its operations. For instance, the choice to acquire Equos is in line with the company’s pursuit of industry compliance. Getting an exchange based in Singapore is just one step in this quest, Byworth added.

Singapore recently released a set of guidelines for cryptocurrency companies. The tight oversight that includes its new payment rules demands that cryptocurrency companies hold valid licenses. Subsequently, more than 150 cryptocurrency startups that have been operating in the country, including Diginex, had to apply for new licenses before July 28.

Singapore hopes that the strict regulations will help the companies to attain the standards that the Financial Action Task Force (FATF) has set.

Equos will initially offer spot trading of cryptocurrencies. However, it has plans of offering perpetual swaps, options, dated futures, among a raft of other derivatives products eventually. The exchange will support the U.S. dollar and USD coin at launch.

Under the Singapore Payment Services Act, a spot trading exchange is licensed under an exemption. However, Diginex has also applied for a license from the Monetary Authority of Singapore as a Major Payment Institution.

Equos will be interoperable with Digivault, Diginex’s cold and hot digital assets custodian. Also, it will work with the parent company’s over-the-counter trading desk and Diginex Access.

First off the Block

Diginex may be the first cryptocurrency with a definite date of going public, but it is not the first to hint at such plans. Early in July, Coinbase, a leading crypto exchange with headquarters in the U.S., allegedly put in motion plans to list in the stock market.

Despite these moves, market experts think that going public may not benefit the cryptocurrency market. Coinbase and Diginex are aiming for direct listing and listing by association, respectively. In both instances, the exchanges will not have to sell new shares as they would if the listing were through an initial public offering (IPO).

Lucas Cacioli, a staffer at Bitcoin News, thinks that the modes of listing preferred by the two exchanges will give the initial investors an excellent exit strategy. However, it may not necessarily come with many benefits to the cryptocurrency market in general.

He reasons that such an action may damage the businesses in the long run. Many mainstream investors may opt to buy shares instead of investing in cryptocurrency options that the exchanges provide. He concludes that such a move may fail to act as a catalyst for the mass adoption of cryptocurrencies, as should be the case.

Final Thoughts

Diginex, a Hong Kong-based financial services company, plans a Nasdaq listing in September. The listing of the company which has just acquired Equos, a cryptocurrency exchange based in Singapore, will happen via the acquisition of a special purpose investment holding firm, 8i Enterprises Acquisition Corp.

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