DX:We can help trade the untradeable|Digital Security Frontier Vision #5
Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry #5
This interview was published in March,2019 in China. And now we also want to share this interview here.In this interview,CEO & Co Founder of DX-Exchange Daniel Skowronski respond to legal risks, asset types, and compliance of Exchange.
Under the integration of traditional market and blockchain technology, the interaction between digital securities and traditional financial market has become more and more.
Tokenization of Amazon, Facebook, Google and Tesla stock by DX.Exchange rocked the world of traditional finance, DX-Exchange attracted so much attention. And this way is being talked as“a new model for STO ”
1、We know that DX.Exchange is regulated by the European Union. To be a STO exchange in Europe, what licenses should you have?
Skowronski ：There are different requirements depending on which country in the EU is you are homebased. Our affiliate company MPS is based in Cyprus. They are licensed as a Market Maker which falls under the European Union MIFID II and ESMA guidelines. This license allows MPS to make markets, trade and hold on behalf of customers transferable securities. On the DX.Exchange trading platform, MPS is the counterparty between all professional investors trading in Security Tokens on the exchange.
2、According to some reports，DX.Exchange uses Nasdaq’s Financial Information Exchange protocol to deliver its products, and make stock from Nasdaq system transfer of security tokens.Is that true ?Is that means the trading system of DX.Exchange has completed API docking with the NASDAQ system?
Skowronski ：DX.Exchange has licensed and integrated NASDAQ’s matching engine and surveillance technology. When an investor on DX.Exchange makes a trade on the platform, their trades are matched either through the API or directly on the Nasdaq matching engine itself.
3、Currently, the digital stocks selected by DX.Exchange include Alpha Bet, Apple, Amazon.com, etc. How do you determine the purchase quantity and pricing of these digital stocks ? Can users transfer (or sell) stock tokens to other buyers? Are there restrictions on investors during the transaction? Must be a qualified investor?
Skowronski ：To trade Digital Stocks and ETF’s there are some additional questions that a user on the DX platform will need to answer. Once completed they will have full access to trade our Digital Stocks and ETF’s but generally you do not need to be a qualified investor as they are a derivative product not a security token. The digital stocks such as Tesla are backed 1–1 by real world stocks like a stable coin. The benefits of trading digital stocks are the ability to trade 24/7 and fractional share ownership. In the case a fraction of a share of Tesla is purchased, MPS will always round up thus backing even the fraction by one full share. Since our digital stocks are built on the ERC20 protocol, users can take their digital stocks to their own wallet once that wallet is “whitelisted”. Users can only transfer between the exchange and other “whitelisted” wallets.
4、What are the types of tradable assets offered by DX.Exchange different from other digital securities trading platforms?
Skowronski ：In addition to the Digital Stocks, DX offers trading in the top Crypto pairs including fiat pairs. DX recently added the top traded ETF’s for investors and just announced that we are taking listings for our new STO market place for professional traders.
5、 Some people have now questioned: “Why not buy Nasdaq stock directly but to use digital currency to buy?” What do you think?
Skowronski ：Trading in traditional stocks has typically been only available to the middle class and the wealthy. DX realizes that tokenization of digital assets has not only the potential to revolutionize the world of finance, but also help create wealth for people regardless of their social or economic status. The barriers to investment with digital assets are far lower than they are with traditional markets. Digital assets offer fractional share ownership and 24/7 trading. Even the unbanked people can now purchase and invest in digital assets. The internet ushered in a similar wave of disruption. With digital assets, the accessibility and availability of investment opportunities for the world will increase dramatically.
6、Is the use of digital currency to buy shares in US listed companies subject to SEC regulation or constraints?
Skowronski ：We do not accept USA clients on the DX.Exchange trading platform. Therefore, the SEC has no jurisdiction.
7、Your business partner MPS MarketPlace Securities is a Cyprus-licensed firm, DX.Exchange is fully EU regulated, US listed company stock transactions are regulated by the SEC, will this bring some legal risks? What do you think of these potential legal risks?
Skowronski ：The digital stocks and ETF’s listed on DX.Exchange are derivative products under the MIFID II directive and are not classified as securities. These derivative products are also not open to USA customers, therefore, the SEC has no jurisdiction. We have all the necessary legal opinions and approvals from our regulator in the EU to offer these products.
8、Now many people think that shortage of liquidity is the big problem of STO industry, how do you see that? As a high-profile exchange, how will you solve this?
Skowronski ：On of the biggest challenges facing STO’s is the lack of liquidity for investors to buy and sell in the secondary market. Today, there are only one or two exchanges that offer trading in STO’s and mainly OTC which is not very user friendly. DX.Exchange has now launched the ability for STO’s from all around the world to list their STO on the DX trading platform complete with order book and with all trades matched on NASDAQ’s matching engine for professional traders. DX’s easy to user interface will allow professional traders to browse and invest in STO’s form all over the world with a click of the button.
9、Cryptocurrencies，Digital stocks，Digital ETFs，STO，How do you think the financial industry is reforming?
Skowronski ：We are seeing several countries starting to embrace crypto currency while others are still watching the space. As long as innovation continues, we will see more adoption. As for Security Tokens, there is already a solid framework for regulations in place in most jurisdictions. However, we need regulators around the world to provide clarity and guidelines while protecting investors but without stifling innovation.
10、Is there anything else that you would like to share about DX.Exchange?
Skowronski ：“Our vision is to bridge the gap between the old world and the new digital world. We believe that all assets whether its securities, art or real-estate will be tokenized. This tokenization has many benefits but the strongest is the ability to help create wealth for people all over the world no matter their social economic situation. At DX, we can help trade the untradeable.”
CEO & Co Founder Daniel Skowronski
Thank you for the interview!
- Check Chinese version of this interview here
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