Alternative trading system (ATS) operator Nextrade (NXT) has been cleared by the Fair Trade Commission of allegations of technology theft that surfaced during the preliminary licensing process for an over-the-counter exchange for fractional investments. The NXT consortium led by Nextrade plans to proceed with full-license preparations, targeting a market launch in the fourth quarter of this year as originally planned.
According to Nextrade on the 4th, the FTC notified on the 2nd of its decision to clear the company of allegations of unfair use of technology and obstruction of business activities raised during the preliminary licensing process for beneficiary-certificate over-the-counter brokerage (an over-the-counter exchange for fractional investments).
Earlier, fractional-investment platform Lucentblock raised technology-theft allegations, claiming that Nextrade had signed a non-disclosure agreement (NDA) on the premise of participation in its consortium and then used internal materials such as Lucentblock's business plan and customer-acquisition know-how to pursue its own independent business. In response, the FTC launched an on-site investigation of Nextrade's headquarters in April this year.
However, the FTC determined that the materials provided by Lucentblock were difficult to regard as legally protected technology, and that it could not confirm that Nextrade actually used the materials in its business. It also concluded that it was difficult to find that Nextrade intended to obstruct Lucentblock's business activities, and that no causal relationship was recognized between Lucentblock's failure to obtain preliminary approval and Nextrade's conduct.
With this decision resolving the biggest risk factor surrounding the licensing process for the fractional-investment over-the-counter exchange, the Financial Services Commission's full-license review is also expected to resume soon. When granting preliminary approval to the Nextrade consortium in February this year, the FSC had set the FTC's investigation results as a precondition for the full-license review.
The NXT consortium plans to continue full-license preparations, targeting a market launch in the fourth quarter of this year as originally planned. The consortium has named the exchange "NexChange" and is working on equity-investment approval, securing specialized personnel, building a trading system, and establishing market operation rules. In particular, drawing on the trading-platform operating experience of consortium member Musicow, the consortium plans to build a system with enhanced stability and convenience, and to supply fractional-investment products such as music-royalty beneficiary certificates to drive the market's early stabilization.
The NXT consortium's preparatory committee includes Nextrade, Shinhan Securities, Musicow Invest, and Blueard. A Nextrade official said, "Since the allegations of technology theft have been resolved through the government's in-depth investigation, we will actively respond to any conduct that gives rise to unnecessary misunderstanding going forward."
