Australian crypto company DigitalX has entered into a joint venture with a US bank

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  • Australian crypto-company DigitalX has partnered up with US bank AmerX in a 50/50 joint venture.
  • The JV entity aims to generate revenue by offering crypto advisory services and assisting in security token offerings.
  • Shares in DigitalX have fallen by around 86% this year, coinciding with an extended decline in the value of Bitcoin.

Listed blockchain company DigitalX has announced a joint venture partnership with Americas Executions (AmerX), a US-based bank which provides crypto advisory services.

The JV entity will be called DX Americas LLC, and aims to provide crypto advisory services and help facilitate security token offerings (STOs).

DigitalX and AmerX — which is registered with the SEC — will both have a 50% share in the new entity, and will be entitled to an equal share of any profit distributions.

β€œThe STO market represents the next wave of blockchain-based asset adoption and with the secondary trading markets opening up in 2019, the timing for the new venture is right,” said DigitalX managing director Leigh Travers.

The JV aims to generate revenue by charging “consulting fees on structures appropriate for STO offerings, advisory fees and work completed in relation to smart contract developing and marketing”, the statement said.

The ASX-listed DigitalX was an adviser to the October 2017 initial coin offering (ICO), carried out by Perth-based solar energy trader Power Ledger. At the time, it was the first ICO seen in Australia and reportedly raised $34 million.

In 2018, significant doubts have been raised about the capital-raising capacity of ICOs, following a string of failures and increased regulatory oversight.

As at 30 June this year, DigitalX reported total assets of $US11.568 million, including $US5.77 million of cash and $US4.5 million of digital assets.

The company’s year-end accounts, signed off by auditor Grant Thornton, showed Bitcoin holdings at $2.764 million as the end of June.

That was based on the following calculation, derived from Bitcoin’s June 30 valuation shown on the website coinmarketcap.com:

DigitalX financial statements

A short time ago, Bitcoin prices had slumped to around $US4,200 following a market crash earlier this week.

So assuming no Bitcoin sales since year-end, DigitalX’s Bitcoin holdings would now be worth around $US1.82 million.

The company’s share price topped out at around 44 cents in January this year, just after Bitcoin reached its all-time high of around $US19,000.

In line with Bitcoin’s subsequent decline, shares in DigitalX have since fallen to around 6 cents.

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