SecProbe.io

CORRESP
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filename1.htm

Mark
Selinger

Tel
212.801.9221

Fax
212.801.6400

Mark.Selinger@gtlaw.com

February
21, 2023

U.S.
Securities and Exchange Commission

Division of Corporation Finance

Office of Technology

100 F Street, N.E.

Washington, D.C. 20549

    Attention:
    Mark Brunhofer

    Sharon Blume

    Eric Envall

    Sonia Bednarowski

    Re:
    INX Ltd.

    Fork 6-K

    Filed November 15, 2022

    File No. 000-56429

Dear
Mr. Brunhofer:

On
behalf of INX Ltd. (the “Company”), we are writing to submit the Company’s responses to the comments of the staff (the
“Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission,”
or the “SEC”) dated December 21, 2022, relating to the above referenced Form 6-K (File No. 000-56429) filed by the Company
on November 15, 2022 (the “Form 6-K”).

For
ease of review, we have set forth below each of the numbered comments of your letter and the Company’s responses thereto.

Greenberg
Traurig, LLP | Attorneys at Law

One
Vanderbilt Avenue | New York, New York 10017 | T +1 212.801.9200 | F +1 212.801.6400

Albany.
Amsterdam. Atlanta. Austin. Berlin¬. Boston. Charlotte. Chicago. Dallas. Delaware. Denver. Fort Lauderdale. Houston. Las
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Miami. Milan». Minneapolis. New Jersey. New York. Northern Virginia. Orange County. Orlando. Philadelphia. Phoenix. Portland.
Sacramento. Salt Lake City. San Diego. San Francisco. Seoul∞. Shanghai. Silicon Valley. Tallahassee. Tampa.
Tel Aviv^. Tokyo¤. Warsaw~. Washington, D.C. West Palm Beach. Westchester County.

Operates
as: ¬Greenberg Traurig Germany, LLP; *A separate UK registered legal entity; +Greenberg Traurig, S.C.; »Greenberg Traurig Santa
Maria; ∞Greenberg Traurig LLP Foreign Legal Consultant Office; ^A branch of Greenberg Traurig, P.A., Florida, USA; ¤GT Tokyo
Horitsu Jimusho and Greenberg Traurig Gaikokuhojimubegoshi Jimusho; ~Greenberg Traurig Nowakowska-Zimoch Wysokiński sp.k.

www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 2

Current
Report on Form 6-K filed November 15, 2022

General

 1. We
                                            note that you operate a crypto asset platform, INX.One, and that you offer crypto asset-related
                                            products and services, including the INX Token, the INX ATS, capital raising services (e.g.,
                                            minting and issuing crypto assets) as well as the ability to exchange AVAX, BTC, CRV, ETH,
                                            FTM, GYEN, LTC, MANA, MATIC, LINK, SAND, UNI, USDC, ZEC, and ZUSD on INX.One. In future filings,
                                            please identify all of the crypto asset services that you provide for each crypto asset.
                                            In this regard, we note your disclosure that you continue to expand your product offerings
                                            available on INX.One.

Response:
In response to the Staff’s comment, the Company respectfully notes that it provides the following services for all crypto assets
available on its platform:

 ● Crypto
                                            assets trading (such as BTC, ETH, AVAX);

 ● Security
                                            tokens listing and trading; and

 ● Capital
                                            raise services through primary offerings.

INX.ONE is a platform for trading and investing in digital assets,
i.e. crypto assets and security tokens. There are two entities behind each type of asset classes – (i) INX Digital, Inc.
(“INXD”), which is utilized for crypto assets dealing and has a license to operate in 43 states in the United States (“U.S.”)
plus Washington D.C and Puerto Rico (for state licenses please see: https://www.inx.co/legal/state-licenses/); and (ii) INX Securities,
LLC (“INX Securities”, or “INXS”), a FINRA-registered broker-dealer and operator of an alternative trading system
(“ATS”), which has duly filed its Form ATS with the Commission. As further explained below, the Company operates on a self-custody
model where customers hold their own security tokens in their wallets (MetaMask). The Company only accepts and processes U.S. Dollars
(“USD”) as a fiat currency on its platform. Each crypto asset listed on the platform and available for trading goes through
a vetting process by senior management and the chief compliance officer, all as further explained below.

INXS has been approved by FINRA to operate as a three-step ATS for
trading digital asset securities, pursuant to the Commission’s letter to FINRA on September 25, 2020, titled “ATS Role in
the Settlement of Digital Asset Security Trades” (the “ATS Letter”). The relevant INXS trade workflow, which INX believes
comports with the three-step process in the ATS Letter and has been disclosed to FINRA, currently operates as follows:

 ● On
                                            the digital asset securities side, the buyer and seller each must have a MetaMask wallet
                                            to hold digital asset securities. INX has the ability to communicate to these MetaMask wallets
                                            to give the customer conditional instructions that result in the transfer of digital asset
                                            securities to/from the appropriate wallets.

    Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 3

 ● On
                                            the cash/funds side, the buyer and seller each have their own individual bank accounts, which
                                            must be connected to the customer’s personal bank account.

 ● The
                                            sell order and buy order are entered into INXS.

 ● INXS
                                            verifies order eligibility, including confirmation that sufficient amounts of digital asset
                                            securities are held in the seller’s MetaMask wallet and that sufficient funds are held
                                            in the buyer’s bank account.

 ● If
                                            the orders are verified, INXS matches the buyer’s bid with the seller’s ask.

 ● Following the match, INXS, as ATS operator, communicates to the customer
conditional instructions with the appropriate MetaMask wallet to transfer the digital asset security from seller to buyer while simultaneously
communicating with the customer’s bank to transfer cash from buyer to seller.

 ● INXS
                                            displays the order as executed.

    Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 4

Please
also identify the jurisdictions in which these crypto assets and your crypto asset products and services are currently available. In
this regard, we note your disclosure that you continue to expand your service offerings to customers from more jurisdictions and globally
and that, during the third quarter, you added six countries to the approved jurisdictions. Please consider using a table or a chart to
show the various crypto assets, crypto asset products and services and the jurisdictions in which each is available. Similarly, please
identify the fiat currencies that may be used on your platform.

Response:
In response to the Staff’s comment, the Company respectfully refers the Staff to the following charts:

    Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 5

 2. We
                                            note that you are not authorized or permitted to offer your products and services to customers
                                            outside of the jurisdictions where you have obtained the required governmental licenses and
                                            authorizations. In future filings, please describe any material risks you face from unauthorized
                                            or impermissible customer access to your products and services outside of those jurisdictions.

Response:
In response to the Staff’s comment, the Company respectfully notes that it intends to describe any material risks it faces from
unauthorized or impermissible customer access to its products and services outside of those jurisdictions, by including the following
risk factor in the Company’s upcoming annual report on Form 20-F:

As
we continue to expand our business and customer base outside the United States, we may be vulnerable to risks related to unauthorized
or impermissible customer access outside of the jurisdictions in which we operate, which may result in significant legal and financial
exposure, damage to our reputation, and a loss of confidence in the services we provide

As
we expand and localize our international activities, we have become increasingly obligated to comply with the laws, rules, regulations,
policies, and legal interpretations of both the jurisdictions in which we operate and those into which we offer services on a cross-border
basis. For instance,
financial regulators outside the United States have increased scrutiny of crypto asset exchanges over time, such as by requiring crypto
asset exchanges operating in their local jurisdictions to be regulated and licensed under local laws.

Regulators
worldwide frequently study each other’s approaches to the regulation of the crypto economy. Consequently, developments in one jurisdiction
may influence other jurisdictions and any such development may be extended to additional services and other jurisdictions. As a result,
risks created by any new law or regulation in one jurisdiction are magnified by the potential that they may be replicated, affecting
our business in another jurisdiction or involving another service. Conversely, if regulations diverge worldwide, we may face difficulty
and increased expenses adjusting our products, services, and other aspects of our business with the same effect. These risks are heightened
as we face increased competitive pressure from other similarly situated businesses engaging in regulatory arbitrage to avoid the compliance
costs associated with regulatory changes.

Although
the Company monitors closely the above mentioned risks and takes proactive steps to mitigate them, any breach or unauthorized customer
access to products and services outside jurisdictions in which we operate could result in significant legal and financial exposure, damage
to our reputation, and a loss of confidence in the services we provide that could potentially have an adverse effect on our business,
while resulting in regulatory penalties or the imposition of burdensome obligations by regulators.

Describe
any steps you take to restrict access of U.S. persons or persons in other jurisdictions to any of your products and services and any
related material risks.

In
response to the Staff’s comment, the Company respectfully notes that it has implemented a procedure which limits access to its
platforms to the following customers, and of which has previously successfully completed the Company’s Know Your Customer (“KYC”)
onboarding process:

 ● customers
                                            who reside in countries/jurisdictions and U.S. States that the Company is licensed to operate
                                            in; and

 ● customers
                                            who wish to use the Company’s services, at their own initiative, who reside in jurisdictions
                                            in which the Company does not hold a license, but where the Company has determined that there
                                            are no restrictions that restrict such access. The Company does not solicit customers from
                                            countries in which it is not properly licensed to do so, but may accept customers if they
                                            come of their own accord and there are no current restrictions.

    Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 6

The
Company regularly evaluates laws and regulations in different countries and decides whether to allow trading to users in that country.
For specific jurisdictions, the Company has from time to time consulted with legal counsel to assist in determining whether or not to
allow trading to users in those countries.

Decisions
on whether to allow access for customers from a certain country lie with the Company’s management, in cooperation with the legal
and compliance teams, who assess the risk of doing business in that country. In regard to securities trading, the decision whether or
not to permit trading in a specific state is also coordinated with our third-party technology and banking providers that assist with
anti-money laundering and KYC screening.

The
Company’s procedure further details actions to be taken by the Company’s compliance function to ensure that it reviews, monitors
and operates in jurisdictions in accordance with the risk appetite of the Company.

 3. In
                                            future filings, please disclose the risks and limitations of your internal policies and procedures
                                            for determining whether or not a crypto asset is a security, including that they are risk-based
                                            judgments made by the company and not a legal standard or determination binding on any regulatory
                                            body or court.

Response:
In response to the Staff’s comment, the Company intends to describe risks and limitations of its internal policies and procedures
for determining whether or not a crypto asset is a security by including the following risk factor in the Company’s upcoming annual
report on Form 20-F:

A
particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty.
If the Company is unable to properly characterize a digital asset listed for trading as a “security”, it may be subject to
regulatory scrutiny, inquiries, investigations, fines, and other penalties, which may adversely affect the business, operating results,
and its financial condition.

The
Commission and its staff have taken the position that certain crypto assets fall within the definition of a “security” under
the U.S. federal securities laws. The legal test for determining whether any given crypto asset is a security is a highly complex, fact-driven
analysis that may evolve over time, and the outcome is difficult to predict. The Commission generally does not provide advance guidance
or confirmation on the status of any particular crypto asset as a security. Furthermore, the SEC’s views in this area have evolved
over time and it is difficult to predict the direction or timing of any continuing evolution.

    Greenberg Traurig, LLP | Attorneys at Law www.gtlaw.com

    U.S. Securities and Exchange Commission

February 21, 2023

Page 7

It
is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact
the views of the Commission and its staff. For example, Chair Gary Gensler has repeatedly remarked on the need for further regulatory
oversight on crypto assets, crypto trading, and lending platforms by the SEC. Public statements made in the past by senior officials
at the Commission have indicated that the Commission does not intend to take the position that Bitcoin or Ethereum are securities (in
their current form). In May 2022, the Chair