FAQs

Frequently Ask Questions

Below you will find the answers to the questions we get asked the most about 1exchange (1X) for companies, investors and blockchain. 

Most Frequent Questions By Investors

Tradeable Securities are securities listed on 1X and are available for investors to buy and sell. Besides that, Tradeable Securities are backed by Ordinary Shares of the private company. Tradeable Securities are issued by a Special Purpose Vehicle (SPV), which in turn owns the securities in the private company.

Investors can directly sign up for an account and complete the Know Your Client (KYC) / investor verification process to start trading on 1X. Investors in Singapore must qualify as institutional investors or accredited investors. Investors who participate on 1X includes individual investors, angel investors, business owners, professional fund managers, family offices, etc.

Buyers include accredited individuals, angel investors, family offices, professionals, business owners, etc. Sellers of private company shares include employees, owners, and institutional fund managers.

1X has a Recognised Market Operator (RMO) licence that is regulated by the Monetary Authority of Singapore (MAS). With this licence, it ensures the market to be fair, orderly, transparent and efficient while reducing systematic risk.

Our Trading Hours are from 9 am to 5 pm SGT, on Singapore Business Days from Mondays to Fridays (excluding Singaporean Holidays). You may only place Orders or Trades during Trading Hours.

Investors invest in Tradeable Securities, which are backed by ordinary shares of the private company. The initial price of the Tradeable Securities determined via a transparent Dutch Auction process. After that, Tradeable Securities are traded freely on the 1X private market.

1X provides partial exits for private companies. Private companies must meet the minimum criteria, such as having a minimum revenue of SGD2 million or raised at least SGD4 million. The companies must have at least 12 months of working capital, operationally stable and free from any legal or financial dispute. 1X aims to list late-stage, venture-backed start-ups or family-owned private businesses.

When this situation occurs, all Tradeable Securities are redeemed by the Special Purpose Vehicle (SPV). 1X investors will receive an equivalent number of Ordinary Shares in the underlying company.

Two-factor authentication is required during logging in or making a transaction. By keying in your password and One-Time Password (“OTP”) that send to your mobile, it provides an additional layer of security and prevents unauthorised transactions.

Investors of Tradeable Securities do not have voting rights in the underlying company. As per Listing Rules, the underlying company will require to announce any disclosures or updates on 1X and made available to all investors.

Most Frequent Questions By Companies

1X has a Recognised Market Operator (RMO) licence that is regulated by the Monetary Authority of Singapore (MAS). With this licence, it ensures the market to be fair, orderly, transparent and efficient while reducing systematic risk.

Tradeable Securities are securities listed on 1X and are available for investors to buy and sell. Besides that, Tradeable Securities are backed by Ordinary Shares of the private company. Tradeable Securities are issued by a Special Purpose Vehicle (SPV), which in turn owns the securities in the private company.

A direct secondary sale is typically a highly elaborate process. While private shares retain their complex rights and obligations, it also limits the number of potential buyers and the process is complicated. When incoming buyers left with an illiquid asset, the asset is unable to trade out easily.

On 1X, Tradeable Securities, based on your company’s ordinary shares, is listed on our exchange and freely tradeable for investors. It is ongoing liquidity and allows your company to reach the true valuation potential.

IPOs are only suitable for companies at the right phase of growth and require significant preparation work, time and costs. The size of your selling shareholders looking for exit may also be too small for an IPO to make commercial sense. For 1X, the process provides an alternative option for partial exits and at a lower cost.

Investors must be qualified as accredited investors or institutional investors. Investors who participate on 1X includes individual investors, angel investors, business owners, professional fund managers, family offices, etc.

Before listing, we require private companies to undergo a Campaign process to determine the share price. Our affiliate, CapBridge, manage the campaign process. Private companies can undergo a primary placement (issuance of new shares) and/or secondary placement (sale of existing shares). During this stage, the company require to engage a 3rd party valuation agent to set a reserve price for each share. This process will take up a couple of months. The company is responsible for any 3rd party advisory and valuation fee, and a success fee to CapBridge for the fundraise during the campaign. 

For CapBridge, 5% of the success fee is charged and payable by:

  • The company if the company is raising primary placement (e.g. investors are purchase new securities by the company)
  • Selling shareholders if the company is undergoing a secondary placement (e.g. investors are purchasing existing securities from selling shareholders)

Once listed, any Ordinary / Common shares from the campaign will be listed via SPV and made available on 1X for trading as Tradeable Securities. The company required to pay an annual listing fee of SGD5,000, and any pass-through SPV fees. Also, companies must continue to comply with “Light Touch”.

There is a charge of 2.5% of the trading commission on 1X for buyers and sellers. 

As part of the campaign process, we require a 3rd party valuation for all selling shares. Professional audit firms or financial advisors usually conduct the valuation.

All Tradeable Securities are issued by SPV, which will be a single entry into your cap table. Any bought or sold Tradeable Securities will not affect the cap table.

Most Frequent Questions About The Blockchain

  • Reduced capital market transaction cost (as compared to traditional exchanges)
  • Reduced settlement time
  • Remove the need for reconciliation
  • Expansion to global markets
  • Enable digitalised corporate action (future)
  • Transparent real-time data reduces information asymmetry and creates fairer and more equitable markets
  • Fast and seamless settlement and verification = Faster deployment of capital
  • More resilient infrastructure = Less risk of service disruptions
  • Complete chain of custody = Reduced counterparty and transactional risk
  • Programmable assets = Further efficiency through customisation of features leading to enhanced investor relations, compliance, and taxation processes
  • Use of Smart Contracts = Greatly reduces errors and risk of fraud
  • (future) Integrated DvP = Greatly lowers counterparty risk and ensure transactions to be complete

While blockchain does offer a large number of benefits, we recognise that there are challenges as well. The partnership between ConsenSys and CapBridge provides a comprehensive strategy to design, development and check the processes of the project. Both ConsenSys and CapBridge have sought deep and extensive feedback and guidance from professionals in the private market, regulators, partners, and other industry specialists. A comprehensive and rigorous process to document and obtain support from regulators is underway by covering proof-of-concept through to execution.

While blockchain transactions are immutable, applications on top of the blockchain are programmable that allows reversal-like behaviour. This behaviour could be similar to the standard accounting practice of posting a reversal.

1exchange and affiliates are ultimately responsible for ensuring shareholdings to be accurate and maintain the ability to step in when required

  1. Smart contracts to serve as shadows of the offline shares registry
  2. Information on-chain includes:
    • Public addresses which are associated with investor accounts
    • Balances of tokens per account
    • Records of token issuance, distributions, and transfers (trades)

SGX is a strategic shareholder/investor and were involved in the regulatory aspects of the document

Project Ubin, a Monetary Authority of Singapore (MAS) project that explores the development of a digital central bank issued tokens, can be seen as a critical enabler for 1X. While the current version of 1X developed as a platform, it does not integrate fiat settlement on the blockchain, which Project Ubin can offer significant advantages. Transactions settled on the Project Ubin network can be integrated directly into the securities settlement process on 1X by providing the opportunity of better DvP, which can offer significant improvements over today’s settlement systems.

Ethereum is the largest and most mature blockchain network and ecosystem in the world, as of March 2018:

  • 3+ years of production deployment and 100% uptime
  • One of the most resilient blockchain networks with more than 13,000* connected nodes securing the blockchain
    (Source: ethernodes.org)
  • Proven ability to tokenise assets with more than 1,100 actively traded tokens as of Jan 2018
    (Source: ethplorer.io)
  • World’s largest developer base with more than 1.5 million downloads of Truffle, the most popular dev framework
    (Source: https://truffleframework.com/dashboard)
  • The largest ecosystem of distributed applications with nearly 2,300 Dapps deployed on Mainnet
    (Source: https://www.stateofthedapps.com/stats/platform/ethereum#new)

*Pre-hard fork

All data and information via our platform are consistently maintained and backed up. We can safely migrate to a private chain and/or a different platform when the need arises.

In line with MAS’s Outsourcing guidelines, we will have controls in place to mitigate any risk of 3rd party technology failures, including but not limited to plugins.

  • Platform and business processes will accommodate to address the re-assignment with the confirmation of the user’s identity and regenerate the address.
  • Keys are not recoverable. Thus, we strongly advise keeping your keys in a safe and secure location.

Under these circumstances, we have a few solutions, including:

  • Post reversal transactions for any unauthorised transaction
  • Redeploy the token contract and initiate with last authentic shareholding

The solutions are applicable for any issues with smart contracts.

At this moment, users will only be able to pay via bank transfer.

  1. The smart contracts require permission to allow only authorised platform users to settle transactions
  2. When the trustee received funds from the buyer, a trigger will occur on the platform to settle assets or chain. Thus, submitting a transaction to the blockchain by reflecting the updates to the share registry. 
  1. Attackers have limited ability to impact the platform
  2. Should the network undergo an attack, the attacker could only reorder, remove, or censor authorised transactions. They cannot create new transactions
  3. We will monitor the blockchain for unusual behaviour and use reconciliation reports to identify transactions that have not settled properly

Note: Ethereum Classic has recently undergone attacks and should not be confused with the Ethereum network. Ethereum network has substantially more support (nodes, total hashing power) and it is more difficult and costly to attack.

Our team always constantly be in sync with updates of the Ethereum network and any/all 3rd party software we use. We will take appropriate action to prepare for upgrades that may impact our users or our platform.

The off-chain registry is associated with the manual platform and the single source of truth.

  1. By default, the blockchain is responsive to changes in the off-chain registry and the lag between off-chain registry and confirmation of transactions by the blockchain is expected
  2. We will use a reconciliation report and compare off-chain and on-chain updates. If the blockchain is out-of-sync due to unsuccessful trade transactions, we can re-submit unconfirmed trade transactions as needed.
  1. Keys for the POC kept in Microsoft Azure key vault, an HSM that keeps keys secured in cloud-based data centres.
  2. A layer of authentication are placed around the key vault to ensure only authorised platform participants can access it.

We are not escrowing transactions at this point. Tokens will only exist in a single state, i.e. in a particular investors account.

  1. Right now MetaMask is being used to help investors familiarise with blockchain tools
  2. The signatures from MetaMask are unable to authorise blockchain transactions directly
  3. MetaMask will allow investors to see their share balances. However, they will not be able to transfer assets with their account.

Account-Related FAQs

We are currently supporting bank transactions from Singapore, Malaysia, Indonesia, Thailand, Taiwan, Philippines, New Zealand, Australia, China and Vietnam. If the country of your bank is not in the countries listed above, we are unable to support transactions to your bank at this moment. Nonetheless, we are continuously expanding, and we will support other regions in the near future.

Depending on each bank’s processing lead time, your funds may take 2 to 5 business days to be credited into your account.

It may take 2 to 5 business days for the funds to be reflected in your bank account, depending on your bank’s processing time. 

No, you do not need to wait for your bank accounts to be verified to make a deposit. However, you need to complete both the investor verification and fill up your bank details before you are able to make your first deposit.

If you are based in Singapore, you may deposit and withdraw using SGD and USD.

For users based in jurisdictions outside of Singapore, we are currently supporting only USD deposit and withdrawal. If you wish to trade in any 1X products based in SGD, you may fund in USD and make a real time conversion through the platform.

The exchange rate is determined by our payment service provider, based off the actual real-time exchange rate.

No, there is no limit as to how much you can deposit or withdraw.

We use a licensed payments process in Singapore for the 1X deposits and withdrawal. 1X will be billed and will on pass these charges on a back-to-back basis with no mark up.

Yes. You can withdraw funds into another bank account, provided the bank account is verified by us. If the bank account is new, you will need to input the bank details into your account and have it verified, before withdrawing funds into the account.

Your deposit or withdrawal transactions may or may not be delayed, depending on your remitting bank’s operating hours on public holidays. 

Yes, You can remove your bank account directly from your account. 

Unfortunately, you will not be able to cancel your withdrawal request once it has been submitted.

To withdraw USD, you will need to link a bank account that supports this currency transaction. You can submit your USD bank details through the platform and withdrawals can be made to the new USD account, once it has been verified by us.