Hong Kong Firm to Invest $160 Million in tZERO’s Security Token Offering
Overstock’s blockchain innovation subsidiary tZERO has signed a letter of intent (LOI) with Hong Kong-based GSR Capital in a deal that will see the investment firm drop $160 million USD on tZERO’s Security Token Offering (STO). Along with the move, tZERO declared they were pushing back the STO’s end date to August 6th, 2018.
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We’ll Take 16 Million Tokens, Please
GSR Capital, co-founded by powerhouse Chinese investor Sonny Wu, has agreed to a LOI with tZERO to buy up $160 million worth of tZERO’s security tokens.
GSR will buy the tokens, which have been priced at $10 each, according to a Simple Agreement for Future Equity (SAFE). In other words, in exchange for the influx of capital, tZERO will issue the requisite amount of stock to GSR at a later date. Accordingly, GSR Capital will own 16 million of the tokens at the end of their purchases.
Notably, tZERO has said the STO’s conclusion has been rescheduled for August 6th of this year in order to “accommodate GSR and other investors.” The latest LOI brings the tally of tZERO’s SAFEs to nearly $170 million. The blockchain innovator will use the capital to launch the cryptoverse’s “first regulated security token exchange” and further build out the tZERO team.
Patrick Byrne, Overstock’s founder and the Executive Chairman of tZERO, said the deal will help to actualize the “historic” mission at hand:
“I want to thank our strategic investors again for their continued support, as well as the tZERO team for their ingenuity in making a preferred equity security token possible. Years ago we saw the world-shaking potential of blockchain, and since then we have been methodical in building tZERO into a company that will bring great efficiency and transparency to capital markets domestically and abroad. I truly believe what we are doing is historic and, while there is still much to be done, our success in this STO has given us the resources we need to see it through.”
Securities Tokenization Rising
The GSR Capital deal brings Byrne’s tZERO that much closer to first-mover milestones in the fledgling field of securities tokenization. But they’re not the only ones making securities-minded moves.
For instance, at the beginning of June 2018 Coinbase made a trio of acquisitions in buying up Digital Wealth LLC, Keystone Capital Corp. and Venovate Marketplace, Inc. — a series of purchases that seemingly fast-track Coinbase’s pursuit of becoming a regulated blockchain-based securities broker-dealer.
Similarly, Uphold, a multi-currency and exchange platform, just announced its intent to purchase JNK Securities — a New York broker-dealer and member of the New York Stock Exchange (NYSE). The move, like Coinbase’s, will position the platform toward regulatory compliance amid the ongoing wave of tokenization.
So, as digitizing securities comes into increasing focus, the big players are already making major preparations. Look for such a dynamic to only pick up steam in the weeks and months ahead.
What’s your take? Do you think securities tokens will be huge in the future? Sound off in the comments below.
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