Virgin Islands-based cryptocurrency exchange Bitfinex is moving into the security token offering (STO) industry by launching a new STO platform regulated in Kazakhstan.
Bitfinex Securities, Bitfinex’s blockchain-based investment product provider, has launched its investment exchange regulated in Kazakhstan’s national financial hub, the Astana International Financial Center (AIFC), the firm officially announced on Monday.
The new STO platform will operate under the AIFC Fintech Lab, a regulatory sandbox established in the AIFC by the Astana Financial Services Authority to support development in the financial industry. Bitfinex Securities chief technology officer Paolo Ardoino told Cointelegraph that Bitfinex Securities is operating from a special economic zone in Kazakhstan, which has an independent court system, adding:
"The financial framework of the AIFC is based upon the best standards from developed financial centers such as the UK, Singapore, Abu Dhabi and Dubai. Kazakhstan is an emerging hub in Asia well placed geographically to service our Asian and European markets and it’s poised to play an important role in this emerging alternative financial system."
Bitfinex Securities will be available 24/7, providing investors with more ways to diversify their portfolios by raising capital for issuers seeking to trade their tokenized securities publicly. “This meaningful step for the industry will widen access to a variety of innovative financial products, including notably blockchain-based equities and bonds, along with investment funds,” Bitfinex said in the announcement.
Bitfinex Securities launched public landing pages and opened know verification on Monday, planning to run Know Your Customer identification in the next four weeks. The exchange then expects to debut trading with Exordium (EXO), a security token “representing equity and profit sharing rights” on Liquid Securities, a platform built on top of Bitcoin (BTC) sidechain Liquid Network.
According to a legal statement, Bitfinex Securities has an extensive list of jurisdictions and persons prohibited from trading on the platform. Prohibited persons include individuals in the United States, citizens or residents of Canada, Switzerland, the British Virgin Islands, Venezuela, Austria and Italy. Prohibited jurisdictions include any jurisdiction subject to a comprehensive embargo by Kazakhstan, the U.S., British Virgin Islands or the United Nations, including Iran, Cuba, the Crimea region and others.
Kazakhstan has recently been drawing increased attention from the global cryptocurrency community as some of the world’s largest crypto mining companies have been working with local entities to run mining facilities and services in the country. During a crypto mining crackdown in China, crypto mining giants such as Canaan relocated operations and launched new businesses in Kazakhstan in June.
Earlier this year, Kazakhstan’s government was working on a roadmap to support the local crypto industry development, planning to improve the country’s crypto regulations and strengthen the country’s position in the global crypto market.
Disclaimer: This article was updated to reflect that Bitfinex is based in the British Virgin Islands.