tZero Teams for ICO Trading09.27.2017 By Rob Daly Editor-at-Large
tZERO, a subsidiary of Overstock.com, RenGen, and the Argon Group have entered an exclusive joint venture to launch an alternative trading system that will transform the trading of security tokens issued in initial coin offerings in compliance with SEC and FINRA regulations, according to officials from each compnay.
This rapidly emerging asset class of blockchain-based digital tokens has raised more than $2 billion so far this year and cryptocurrencies overall, including digital tokens, have a current market capitalization of $137 billion, making this a huge growth industry. Digital tokens and cryptocurrencies are also changing the face of emerging growth company financing. In the first half of this year, more money was invested in fintech through cryptocurrencies than through venture capital.
“tZERO has been at the forefront of the blockchain revolution for years, working closely with regulators since 2015 – launching the world’s first SEC compliant ATS for blockchain assets, the first private blockchain bond offering, and the first ever public issuance of a blockchain security,” said Patrick M. Byrne, CEO of Overstock. “Now, by combining our expertise with Argon’s advisory services and RenGen’s electronic trading, deep liquidity and market making capabilities, we are in a position to launch the only U.S. SEC-compliant token-trading venue.”
The landmark Joint Venture aims to redefine the way the ICO market looks at security tokens, and enhance liquidity to accelerate market development. Lack of liquidity has been a significant impediment to security token market development. This topic has received much attention since the issuance of the SEC Report on the DAO Release No. 81207 / July 25, 2017, where the SEC made clear that any digital token with an income stream is a security, and furthermore that security tokens may only be traded on an ATS or a National Securities Exchange.
The joint centure will be built in an exclusive collaboration that draws on the distinct strengths of each company, combining tZERO’s blockchain-based trading platform with RenGen’s ability to provide liquidity, market making and algorithm technology, and the Argon Group’s premier ICO advisory experience and security token clients. The Joint Venture will also take advantage of SaftLaunch for AML and KYC capabilities.
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