FTX today launched its equity token, which represents an ownership interest in FT Trading Ltd, the owner of FTX based in Antigua and Barbuda.
An equity token costs 2 USD, and the minimum purchase size is 250,000 USD, FTX announced on Tuesday. The token sale is expected to be completed between March 1 and March 7, depending on supply and demand.
FTX is trying to raise up to $30 million in a capital round, although the ceiling could exceed $50 million. However, there is no maximum investment limit for small investors.
But there are several terms and conditions attached to the equity token. First, it is currently not negotiable on any exchange and is not removable. FTX said they will consider exchanging the token “in the coming years. However, it is unlikely that the token will begin trading, as it would require licensing in multiple jurisdictions.
Second, the token does not provide the same voting rights as the shares of FT Trading Ltd. And finally, while the token does provide ownership of the FTX exchange, the leveraged tokens and possible FTX private labels, it does not provide ownership of the FTT profit token (currently ranked #34 by Coinmarketcap) or any other potential transaction on U.S. land.
Therefore, users should read all terms in detail before clicking on the purchase option. The token can be purchased through the FTX wallet, and the supported methods are US dollar, Bitcoin (BTC), FTT and other tokens. In fact, selling shares for Bitcoins is an unprecedented move.
There is also a small 1% discount for buying with FTT, which means that users could end up getting the capital token for 1.98 USD versus 2 USD.
In particular, the capital token is not available to residents of the U.S. and other prohibited jurisdictions.
The Hong Kong-based FTX launched operations in early 2019 and appears to be growing rapidly has “significant” expansion plans ahead, said Bankman-Fried, FTX’s CEO. “We are looking to expand more generally in tokenized products and trade, and to expand into many markets at once, including major parts of East and Southeast Asia and Eastern Europe,” he said.
It remains to be seen how much FTX ends up collecting through its sale of capital security tokens. Last August, the exchange raised $8 million through the sale of FTT tokens. After that sale, FTX raised “several million” in a round of Binance stock in December.