Europe's DX.Exchange makes waves by listing security tokens for secondary trading

EU-regulated DX.Exchange says it has taken the title as the world's first exchange to allow accredited, non-U.S. investors to trade security tokens post-offering (STOs).

The fiat-to-crypto exchange, which launched in January amid security concerns and offers tokenized shares from Tesla to Apple, noted key distinctions from other platforms like tZero or ATSs.

“What’s great is that this is a real exchange. What’s out there currently is more like an OTC," DX.Exchange’s CEO and co-founder Daniel Skowronski told The Block.

He added that this was the natural evolution for the exchange, which has consistently pushed the boundaries of crypto trading and regulatory expectations.

"The market has been talking about security tokens for over a year, but unfortunately, there hasn’t been much progress...We believe all financial assets will be tokenized in time" he said, noting that the firm hopes to offer all forms of securities on the exchange and will list those who have already done an STO.

Skowronski also clarified U.S. traders still do not qualify to buy or sell security tokens on the platform but was "completely compliant under European regulations," due to its deal with MPS MarketPlace Securities, which acts as a middleman. Only pre-registered users can currently access the platform, and Skowronski said those trading securities would be required to go through extra KYC hoops.

However, some sources involved in Europe's STO market are not sure if the measures go far enough.

"Running a legitimate venue for the trading of securities requires multiple regulatory permissions. DX in Estonia nor MPS in Cyprus (name changed from Spotoption), seem to have the usual permissions needed to run an exchange...The last thing this nascent space needs is consumers to be put at potential risk," one said.


© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Isabel is The Block's London and European reporter. She previously reported for Reuters in Madrid and London, following on from her time as a freelance journalist for the Guardian and the New York Times. She has a Bachelors in War Studies from King’s College London and a Master of Philosophy from the University of Oxford. Conflict of Interest: Edward Woodford, the CEO of SeedCX, is Isabel's brother. She does not report on any issues related to Seed or advise other authors in any regard.