As you are all aware, following the large and sharp drop of crypto markets post ICO, we decided to postpone the listing on the two identified centralized exchanges HitBTC and Coinbene. We also said that once the markets would stabilize and start recovering we would then press ahead with the listing, and we did.

Negotiation for listing conditions is normal and it does not usually take more than a few weeks. However, we faced unexpected difficulties.

At the time of our announcement, we had negotiated the fees to be listed with these exchanges and had requested the associated terms and conditions. Given the type of services we were not anticipating any major issue in these terms, hence our communication.

Basically, the main elements we were looking for were the delisting conditions and liquidity contract that ensures a minimum of activity. You have to be aware that to get listed these days, exchanges need to be comfortable on the fact that your token is not a security — there have been a lot of cases where regulators have re-qualified some projects, mainly in the US. Even the launch of Ethereum is currently being investigated for potential requalification. We knew this very well and had a long-time legal memo stating that NPX is not a security under French law, where we conducted the ICO. All these elements were disclosed to the exchanges before agreeing on a pricing and getting a green light from them.

During our discussions we pressed them to send over their terms and conditions so that we could analyze the potential duties and risks. Unfortunately, they have been pretty slow in answering our multiple requests. When we finally received them, we were unpleasantly surprised.

One of the two exchanges sent us a proper contract, albeit with very few clauses. None of them were dealing with liquidity and the responses we got by email were inconsistent. On the delisting side, they were leaving the door open for it in case NPX would be deemed a security, without specifying under which jurisdiction they would make this analysis. Moreover, as we had provided all necessary documentation, they were not ready to offer some kind of refund in case in one-month time they were to change their analysis. It means that we’d pay the full service upfront without having any recourse in case they change their mind. What’s more, their overall attitude made us uncomfortable.

The second exchange did not provide us with any contract. They just sent us an invoice stating that they have the power to delist your token at any time if you are deemed a security under US or HK laws. Since we have provided them with all necessary documentation on our legal qualification and that they had not requested any analysis of the token under these two laws, we were a little startled. We have tried to open the door for a minimum period of time over which they would not be able to delist us but haven’t received an answer yet. Given that US regulation is getting tighter and that HK law seems to be converging towards it, the risk that any token might be considered as a security in the future is increasing (including ETH).

All in all, negotiations have been much more difficult than expected. Once again, by accepting their terms as is, the risk to be delisted very quickly without any recourse to our initial cost is very high. The current environment is for higher regulatory controls, and exchanges, especially the largest ones, are under scrutiny. They would not bother to ditch a few coins if need be without any financial implication for them.

Listing a token is far from free — we are talking about several hundreds of thousands dollars. We would like to ensure our investor’s money is spent wisely and that minimal safeguards are met to ensure sufficient security and liquidity for the token, in our shared interest.

Now, to deal with this problem and given that this is the major issue for exchanges, we are working on a legal memo from a US perspective. We had structured our whole transaction to avoid the US regulatory constraints, so it is a little bit awkward to do that… but we are working on it anyway.

We are still negotiating with these exchanges to amend the terms. However, as the risk appears very high, we are exploring all options that would ensure a good liquidity to the token and we don’t rule out the possibility of switching exchanges at this stage. We will keep you continuously informed of further developments.

Besides, we have initiated contact with Bancor, a decentralized liquidity network that raised $150m in ICO last year, to diversify away from IDEX, ForkDelta and EtherDelta. Although it is not a regular exchange, it still provides users with a convenient, low-cost way to convert tokens and it has a decent volume (70th rank on CMC). Bancor would bring a higher level of decentralization and liquidity on the short term when it comes to trading NPX. It’s always a good thing.

We are also listed on WandX, a decentralized trading platform of ERC20 tokens. We are currently investigating further their services and even if the platform appears to be still new, it seems reliable and well designed so far. Broadly speaking, we believe in DEX as an essential part of the crypto ecosystem, and we always welcome gateways bringing more accessibility and liquidity to the token.

Again, we are committed to keep you posted on a regular basis on the listing front.

Bear in mind that we are also holders of NPX tokens and that it is in our best interest to provide you access to liquidity.

Yours sincerely,

NapoleonX team