tZERO Expanding Service Offerings Ahead of Highly Touted ICO

Overstock’s tZERO platform is adding new business services as part of its high-profile initial coin offering (ICO). The move is part of a broader plan to make tZERO the biggest ever token raise.

tZERO Expands Services

According to sources, tZERO investors now have the ability to purchase blockchain-enabled digital locate receipts (DLR), which are digitized versions of traditional regulated short sales. The company is also offering a bevy of financial products and services ranging from robo-trading to brokerage services. There’s even an educational component to help investors learn about ICOs.

When it comes to ICOs, tZERO is among the most ambitious yet. The distributed ledger platform is developing a new exchange to trade tokens in a manner that is consistent with SEC regulations. The company is working with Argon Group and RenGen to develop the first U.S. regulated Alternative Trading System (ATS), which will allow the trading of security and app tokens.

In short, tZERO is attempting to build a regulated platform for trading security-like products on the blockchain.

The Overstock subsidiary announced earlier this month it will kick off its ICO on Dec. 18. The company has been accepting registrations since Nov. 15 via SAFTLaunch.

Hybrid ICO

One of the most contentious debates within the ICO community is how to differentiate between a security tokens and a utility token. Although they are conceptually different, there is no clear-cut guidance under current law to differentiate between the two. Most ICOs fear this legal grey area and have devoted considerable effort to avoid security tokens entirely.

This past summer, the SEC ruled that DAO tokens were securities and therefore subject to federal oversight, a sign that regulators were clamping down on ICOs.

tZERO is unique in that it is classified as a security token, but has many utility functions built within its growing ecosystem. Among the tZERO token’s many features include a right to share in a portion of the company’s revenue and the utility to pay for fees on the Alternative Trading System. The company also plans to announce additional utility features in the future.

The planned fundraising campaign is expected to generate between $200 and $500 million, enough to make tZERO the most successful ICO of all time. Although the SAFT pre-sale funding model is generally considered to be a safer option for ICOs, a new report from Cardozo Blockchain Project argues this isn’t necessarily the case.

“[T]he SAFT Approach ultimately fails to deliver a simplified and binary compliant token sale framework as advertised,” the report said. ”

That being said, much of the criticism was centered on the fact that most SAFT raises are likely to be deemed securities. This isn’t particularly an issue for tZERO, which has already embraced its security label and is moving ahead with its crowdsale accordingly.

More that $3.2 billion flowed into ICOs through the first ten months of the year, a figure that is expected to rise considerably as more businesses issue token raises.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi