Overstock's tZero Issues Preferred Security Tokens after Raising $134M via STO

Overstock's blockchain unit, tZero, said it had completed the issuance of its OSTKP security tokens. Holders will be able to trade their units after a 90-day lock-up period.

tZero, the blockchain-focused subsidiary of online retailer Overstock.com, announced on Tuesday it had wrapped up the issuance of preferred security tokens to investors with the so-called signed agreements for future equity (SAFEs). The latter were part of tZero’s security token offering (STO), which closed on August 6, 2018 and generated proceeds of $134 million from more than 1,000 investors worldwide.

tZero CEO Saum Noursalehi commented:

“This is one of the first Security Token Offerings on a decentralized public network, and was conducted in full compliance with the US securities laws.”

“This is an exciting milestone for tZERO, and we are even more enthusiastic about the opportunities this will create for private and public companies wishing to raise capital through security token offerings, and for investors who wish to trade those securities,” he added.

tZero implemented its token contract, created the security tokens and issued them on October 12 into a custodial wallet on behalf of investors. The wallet will keep the tokens locked up until January 10, 2019 to ensure compliance with current securities law and regulations. Upon expiration of the 90-day period, the company plans to let holders trade their tokens on secondary markets. Accredited investors will have the opportunity to use the platform tZero is developing in collaboration with BOX Digital Markets.

Overstock.com founder and CEO Patrick Byrne, who is also the executive chairman of tZero, stated:

“The issuance of the world’s first public cryptosecurity, OSTKP, in 2016 was tZERO’s Chuck Yeager moment: we broke the speed of sound by introducing the concept of real-time trade settlement. Today marks our Yuri Gagarin moment, where we leave behind the confines of the known world of traditional capital markets and take the first steps towards a new market powered by blockchain.”