TZERO Group, Inc.

TZERO (or t0) is a blockchain-based trading platform for capital markets. It started as a majority-owned subsidiary of Overstock.com, held through another Overstock subsidiary, Medici Ventures, the company's blockchain venture fund. The tZERO trading platform was designed to combat naked short selling through the integration of blockchain technology. t0 is also the name of the company's security token.
== Products and Services ==
The company offers its customer-facing digital brokerage services through Dinosaur Financial Group, LLC, and its alternative trading system (ATS), through which it sells its digital tokens via another Overstock subsidiary, Pro Securities LLC. 
Overstock has also been hired by the private firm GSR Capital to develop a securitized token for trading cobalt.
TZERO's most distinctive feature is DLR technology (Digital Locate Receipt), which uses a proprietary blockchain to lend transparency to the practice of short selling. The aim of this technology is to curb "naked" short selling.
=== Mobile trading app ===
TZERO CEO Saum Noursalehi told Coindesk in March 2019 that tZERO was planning on launching a mobile payment application for buying and selling bitcoin, as well as Ether, potentially. The app was scheduled to launch in June and is being developed by a cryptocurrency startup called Bitsy. It launched on June 27, 2019 for iOS devices. On July 26, 2019, the app released a version compatible with Android devices.
=== Bushnell token and the Atari movie ===
In July 2019, tZERO announced that it had entered a partnership with film production and financing company Vision Tree, which was producing a movie about Nolan Bushnell, founder of the video game company Atari. To fund the movie, Vision Tree announced in 2018 that it would aim to raise $40 million through the sale of a digital token, which it had dubbed the "Bushnell token." tZERO announced that with the new partnership, it had agreed to develop the Bushnell token for Vision Tree.
== Company history ==
On June 5, 2015, Overstock announced it would offer the “world's first cryptosecurity,” on its new t0 platform. The name t0 comes from the Wall Street jargon for bond settlements, which typically take three days (“t + 3”) to finalize. According to company statements, bond trades on t0 settle the same day.
TZERO had its first day of stock trading on its shared ledger on December 16, 2016. The previous day, Overstock announced it had raised $10.9m in an offering comprising $1.9m worth of stock traded via digital assets on the t0 platform. Fifty-five people purchased a total of 126,565 shares at $15.68 per share.
In 2017, Patrick Byrne announced a joint venture between Medici Ventures (a subsidiary of Overstock.com) and Hernando de Soto, a notable economist to begin a new blockchain venture, causing a sharp spike in Overstock.com's stock value (OSTK). This venture ended up being called tZERO. Later that year, he announced development of tZERO's DLR, a financial technology that would be developed specifically to "curb naked short sales." Byrne announced in late 2017 that he plans on stepping away from his role at Overstock.com, selling or restructuring the company so that he could focus on developing tZERO full-time.
In May 2018, the company announced that Overstock.com CEO Patrick Byrne would be stepping down as CEO to become tZERO's executive chairman, while former president Saum Noursalehi would take over as CEO, in order to "accelerate" tZERO.
In August 2018, Chinese private equity firm GSR Capital announced its plans to invest $270 million in tZERO, giving it an 18% stake in the company. The announcement also said that GSR Capital plans to invest approximately $104.55 million into shares of Overstock.com, which would give the firm a 10% stake in the online retailer. Overstock.com announced, however, on March 1, 2019, that the investment had been delayed until mid-April 2019. The company reported that Makara Capital of Singapore would join the transaction as GSR's partner. 
TZERO's Parent company Overstock received a subpoena from the U.S. Securities and Exchange Commission on December 9, 2019, regarding a deal for Chinese private equity firm GSR to invest in tZERO, in addition to investments in the parent. In August 2018, Chinese private equity firm GSR Capital announced its plans to invest $270 million in tZERO, giving it an 18% stake in the company. Overstock.com announced, however, on March 1, 2019, that the investment had been delayed until mid-April 2019. The company reported that Makara Capital of Singapore would join the transaction as GSR's partner. Eventually, GSR reportedly would invest only $5 million. According to press reports, even that amount was not fully paid in by the end of 2019. 
=== ICO/STO ===
Patrick Byrne announced the tZERO ICO in October 2017. The ICO, which later became an STO, launched in December of 2017, and ended August 8, 2018. It offered security tokens to only to accredited investors.
TZERO minted its security tokens and issued them on behalf of the token investors on October 12, 2018. In accordance with the terms of the 90-day lock-up requirement, tZERO released the tokens to investors starting on January 10, 2019. Investors could transfer their tokens to their own wallets or to a brokerage account with Dinosaur Financial Group, a broker-dealer. 
=== Medici spinout from Overstock ===
On January 25, 2021 Overstock released a statement saying that it was converting its 100% ownership of Medici Ventures, Inc. into a limited partnership with a Pelion Venture Partners fund as its general partner. Both Medici Ventures and Overstock retain minority interests in tZero. According to the agreement, profits will accrue first to Overstock and over an eight year period, Overstock's investment in the fund will be worked out of Medici. 
== Trading ==
tZERO launched on the afternoon of Thursday, January 24, 2019. CoinDesk reported that traders commenting on trading volumes in a dedicated Telegram chat indicated that daily trading volumes had been light, 7,000 to 23,000 units of tZERO Preferred token (TZROP), in the early weeks of trading. TZROP is the only asset traded on tZERO.
The company first allowed purchases of its TZROP tokens by non-accredited investors on August 12, 2019, after the one year seasoning period required by the U.S. Securities and Exchange Commission. Customers At the launch of public trading, access to the tZero platform was still limited to Dinosaur Financial Group.
Trading data from the ATS for OverStock and Aspen Digital securities as well as TZROP tokens are available on the company's website. 
=== Blue Ocean Financial acquisition ===
In January of 2017, tZERO acquired the assets of Singapore-based Blue Ocean Financial Technology, Pte. Ltd. and formed Blue Ocean Technologies to offer a transparent, electronic marketplace for trading U.S.-listed securities during non-U.S. trading hours.
In April 2018, tZERO launched the first demo videos of its trading software.
=== Patent ===
In January 2019, tZERO won a patent for a "crypto integration platform," which supposedly will be capable of combining market data to determine the best prices for various cryptocurrencies. The announcement also said that tZERO would create specialized hardware related to the platform. 
=== BSTX ===
BSTX (Boston Security Token Exchange), a proposed SEC-regulated stock exchange for tokenized securities, is jointly owned by tZero and BOX Digital Markets LLC, a BOX Exchange affiliate. Once registered, BSTX will operate as a facility of BOX Options Exchange. 
BOX Exchange filed a proposed change to its option market rules on September 27, 2019, to permit it to list equity securities on a separate platform called the Boston Security Token Exchange or BSTX. In its solicitation for comments from the public on the proposed rule change, which the agency published on October 11, 2019, the SEC characterized the proposal saying, ". . . BSTX would operate a fully automated, price/time priority execution system for the trading of “security tokens,” which would be equity securities that meet BSTX listing standards and for which ancillary records of ownership would be able to be created and maintained using distributed ledger (or “blockchain”) technology." 
BOX provides strategic leadership and regulatory counsel for BSTX. TZERO manages technology, administration, maintenance, and support. 
The SEC published BOX Exchange's revisions to BSTX's proposed rulebook on February 28, 2020 as the company continued to develop its concept for a security token exchange. On December 28, 2020, the SEC published in the Federal Register its order disapproving the BOX Exchange rule change that would allow it to operate BSTX. The commission said that, among other things, the proposed design would lead to inaccurate public reporting of transactions. The commission also complained that the material did not contain sufficient information about the workings of the systems for the commission to assess the proposal fully. The order also indicates that there were a number of interactions between the SEC and BSTX which failed to resolve the SEC's issues.
== Key People ==
*Patrick Byrne - Chairman 
*Saum Noursalehi - CEO 
*Steve Hopkins - President
== References ==
 
Category: digital assets
Category: cryptocurrency
Category: altcoins
Category: regulation