Below you will find the answers to the questions we get asked the most about 1exchange (1X) for companies, investors and blockchain.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
Under these circumstances, we have a few solutions, including:
The solutions are applicable for any issues with smart contracts.
Ethereum is the largest and most mature blockchain network and ecosystem in the world, as of March 2018:
*Pre-hard fork
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.
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.
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.
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.
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.
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.
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.
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.
