Overstock has a cryptocurrency unit called tZERO as well as a subsidiary named Medici Ventures that invests in blockchain companies.
GSR Capital, a Hong Kong investment company, will invest $270 million in tZERO. The rest will be in shares of Overstock.
GSR Capital plans to buy $30 million in tZERO security tokens, a form of crypto investments backed by partial ownership of other assets such as stock and bonds.
The GSR Capital deal values tZERO at $1.5 billion. tZero is 80% owned by Medici Ventures. The tZero valuation is higher than Overstock’s current market valuation.
tZero owns brokers dealers and is processing 18 million orders per day
tZero has a modular, adaptable platform which integrates with trade participants to create a real-time, authenticated, immutable ledger. After several years of development, tZERO has positioned itself to capture the fast-growing digital securities market. To date, tZERO has the only platform that has ever traded a digital security, and they are working diligently to build a token trading system to trade tokenized securities.
* tZERO owns two SEC registered and FINRA Member broker-dealers, SpeedRoute LLC, a premier routing and execution firm, and PRO Securities LLC, an Alternative Trading System (ATS) , which is the first SEC and FINRA regulated ATS to enable and support secondary trading of a crypto security (Overstock’s Blockchain Voting Series A Preferred).
* tZERO’s Digital Locate Receipt software, which is in customer production testing, is designed to provide market participants with a more transparent, efficient, and compliant solution for the lending and borrowing of securities.
* tZERO’s proprietary routing technology services over 125 broker dealers and offers connectivity, market access, smart order routing, and algorithmic trading solutions.
* tZERO’s technology infrastructure currently processes 15-18 million traditional orders per day, and is equipped to handle over 100 million orders per day.
* Their ATS allows for 24 hour trading (traditional equity securities), providing liquidity while others are closed.
* tZERO has acquired a majority stake in a robo-advisory firm, capable of running advanced financial models and creating adaptive dynamic portfolios, the benefits of which may be available to token holders in the future.
tZero Goals
* To develop a token trading system capable of trading crypto securities.
* To allow firms worldwide to break the constraints of traditional finance in order to access a global pool of capital for crypto securities with the first trading system for secondary market liquidity.
* The tZERO trading system could close the liquidity gap for securities offerings. In the future, truly liquid security tokens may legally be allowed to trade through the tZERO system, creating a new, legal access point for secondary trading in these securities.
* the tZERO trading system could disrupt existing Capital Markets, by potentially allowing any public or private company to trade their own tokenized security.
* Continued innovation to instil investor confidence in tokenized security trading.
tZERO technology – Digital Locate Receipt
tZERO uses a DLR (Digital Locate Receipt). This is a digitized version of a traditional regulation SHO locate which is one of SEC four requirements for short selling. tZERO’s DLR platform provides its clients with a technological solution to automate the traditional REG SHO locate process to meet operational and regulatory requirements. tZERO’s DLR platform captures all inventory and audit trail information and stores that information permanently on a proprietary blockchain.
