Overstock Subsidiary tZero Completes Issuance Of Preferred Security Tokens

Announcements, News | October 17, 2018 By:

Overstock’s subsidiary tZERO has completed the distribution of its own security token.

tZERO, a Security and Exchange Commission compliant alternative trading system (ATS), raised $134 million in its security token offering (STO) in August of this year, where over 1,000 global investors participated. The company said in a recent press release that on October 12, it completed the issuance and token generation event (TGE) of the tZero preferred equity tokens.

“tZERO deployed its token contract, minted its security tokens, and issued into a tZERO custodial wallet on behalf of investors on October 12, 2018,” the company said. “To ensure compliance with federal securities law and regulations, and in accordance with the terms of the tokens themselves, the tokens will be locked up in the custodial wallet until January 10, 2019 (90 days after issuance). After the 90-day period expires, tZERO intends on offering holders the opportunity to trade tokens, pursuant to private resale transactions, with other accredited investors on a platform that tZERO is in the process of developing with a broker-dealer partner.”

The company is planning to designate an approved trading platform by August 6, 2019 to enable token holders to resell their tokens to non-accredited investors. tZERO will also register the securities to enable secondary trading on international securities exchanges, as well as the BOX Options Exchange it is building in partnership with BOX Digital Markets.

“The issuance of the world’s first public cryptosecurity, OSTKP, in 2016 was tZERO’s Chuck Yeager moment: we broke the speed of sound by introducing the concept of real-time trade settlement,” said Patrick M. Byrne, tZERO executive chairman and the CEO and founder of Overstock.com. “Today marks our Yuri Gagarin moment, where we leave behind the confines of the known world of traditional capital markets and take the first steps towards a new market powered by blockchain. My humblest thanks to all the colleagues and investors that have shared our belief in a system of securities trading based on trust, transparency, and integrity through cryptography-based technologies, rather than one that relies on the mercy of middlemen who may not have the investors’ best interest at heart (and who may even, at times, be bent on mischief.)”

Saum Noursalehi, CEO of tZERO, said that this is one of the first STOs on a decentralized public network, and was conducted in full compliance with the US securities laws.

“This is an exciting milestone for tZERO, and we are even more enthusiastic about the opportunities this will create for private and public companies wishing to raise capital through security token offerings, and for investors who wish to trade those securities,” Noursalehi said.