Overstock.com’s tZERO announced they’re planning to open security token trading platform to retail traders. The opening is arranged for next week starting August 12 when the one year lock-up period for tZERO’s 2018 security token offering (STO) passes away.
Let us just remind you that earlier this year, the platform has gone live with only accredited investors allowed to trade on it. Those investors had the possibility to trade security tokens through the broker-dealer Dinosaur Financial Group. Dinosaur is a partner with a tZERO’s sister company, PRO Securities, that enabled secondary trading of tZERO tokens.
The CEO of tZERO, Saum Noursalehi then explained that the security token sector was missing some kind of regulated place for secondary trading. He claimed that trading of their own security tokens is the “crossing of the Rubicon for the new world of digital assets”. This had the purpose, claimed Noursalehi, to create liquidity, democratize access, bring transparency and efficiency to global markets and accelerate the adoption of security tokens.
Yesterday, however, he announced, that now, their platform is going to be open to all traders, not just the privileged one.
As for now, the alternative trading system (ATS) enables trading in only two tokens: tZERO’s own private equity token – TZEROP, and Overstock’s digital voting series A-1 preferred stock
As people leading the company want to support all the trading pursuits on the platform, Overstock also said that they are going to issue more of their digital shares as a form of dividends.
Noursalehi noted that this will act as a nice handout to their shareholders and it helps the reason for getting a lot of adoption on the platform. For tZERO, he confirmed the number of 50,000 expected investors that already keep Overstock’s shares to begin their digital securities trading.
He pointed out that the interest from the broker-dealer community is constantly increasing saying:
“We had a lot of broker-dealers, about 30 or 40, reach out to us that want to get involved in this ecosystem. We’re working on these requests. Investors have been sending questions as well. They are excited and they are trying to understand it.”
He added that there is a lot of focus on liquidity and, concerning Overstock’s results from the second quarter, he said that “getting that initial adoption is key, as well as getting additional brokers to the table.”
Just for reminder, Overstock reported a revenue decrease of $373.7 million that represents a 23% fall from last year’s $483.1 million. A net loss of $24.7 million was significantly lower than last year’s $64.9 million. tZero, on the other hand, published their pre-tax loss of $10 million.
President of an Overstock’s blockchain investment subsidiary Medici, Johnathan Johnson, commented that the company would be slowing down this arm because there hasn’t been enough progress made.
For now, tZERO has the plans of getting the BitLicense, a virtual currency license required by the New York Department of Financial Services order to operate from within the state.
Noursalehi said that getting the license is a big challenge and that they are hoping to get it within the following six months.
In other news, the company is still under SEC investigation because of the tZERO’s STO. Just to remind you, in March this year, SEC conducted an investigation requesting that the company voluntarily provide certain documents related to the offering itselft and the tokens in connection with its investigation. The investigation pretty seriously ruined the plans to sell Overstock’s flagship retail business.