Overstock.com subsidiary tZERO and BOX Digital Markets LLC have entered into a joint venture which the two companies expect to become the world’s first regulated exchange for trading security tokens. Security tokens are electronic tokens defined as “securities” under U.S. law. The joint venture will seek approval from the U.S. Securities and Exchange Commission (SEC) prior to beginning operations.
Focusing on the development and commercialization of financial technology based on cryptographically secured, decentralized ledgers — more commonly known as blockchain technologies — tZERO operates under the name t0.com Inc.
BOX Digital Markets LLC is engaged in creating and developing markets for trading digital assets in a regulated environment and is a wholly owned subsidiary of BOX Holdings Group LLC, which owns and operates BOX Market, an equity options marketplace.
The companies said in a release that tZERO will provide the technology required to create and operate the joint venture. In addition, tZERO will manage the ongoing technology implementation, administration, maintenance and support. BOX Digital will provide executive leadership and regulatory expertise. Upon obtaining SEC approval, the joint venture will operate as a facility of BOX Options Exchange, an existing registered U.S. securities exchange.
Lisa Fall, CEO of BOX Digital, has been appointed as the CEO of the joint venture.
“We will work closely with the SEC to create a framework for the safe and efficient trading of security tokens and our joint venture with tZERO marks a significant step that brings us ever closer to creating the industry’s first regulated exchange for security tokens,” said Fall. “With BOX’s experience in building and operating a sophisticated equity options marketplace and tZERO’s industry-leading blockchain technology, we have brought together our organizations’ combined expertise to create a more efficient capital market that will benefit traders and issuers.”
“There is no doubt that security tokens are the future of capital markets,” said Saum Noursalehi, CEO of tZERO. “TZERO and BOX Digital will create the first fully regulated security token exchange and fundamentally improve the way capital is raised and traded across different asset classes. Teaming up with Box Digital will allow us to complement our alternative trading system, already under development, with a separate, regulated platform, expanding the reach of our technology to security token issuers of all types, from micro-cap issuers to SEC reporting companies.”
“I believe the greater investing community does not yet understand the extraordinary changes blockchain is going to bring to global capital markets. It is a great honor to have been selected by BOX as their partner for this historic endeavor,” said Patrick Byrne, CEO of Overstock.com and executive chairman of tZERO.