Overstock Updates on tZero ICO, Says $250 Million Offer to be Treated as Preferred Equity in Company


The highly anticipated tZERO initial coin offering (ICO) has finally launched on SaftLaunch. The ICO was delayed once before and appeared to be in a holding pattern earlier today but now the offer is live and open to certain investors. Part of the delay may have to due with the fact it has been announced the tZero token will not provide any type of utility.

According to a note provided by Overstock(NASDAQ:OSTK), the tZero ICO is a pre-sale for institutional investors only. The securities tokens minted by the offer will be treated as preferred equity in tZero. The global offer is seeking $250 million which may be a bit of an adjustment from Overstock CEO Patrick Byrne’s earlier claim that tZero would raise $500 million.

During the pre-sale period which commenced today and is anticipated to run through January 18, 2018, tZERO will enter into Simple Agreements for Future Equity (SAFEs) with strategic purchasers identified by the company. During the period which is expected to commence on January 18, 2018 and to run through February 16, 2018, tZERO will enter into SAFEs with other accredited investors. The exact timing of both sales may be changed.

Byrne said that Overstock is proud to be a market leading enterprise welcoming the “cryptorevolution.”

“Recognizing the Blockchain technology-driven transformation and disruption already underway across numerous industries, Overstock today opens the tZERO ICO,” said Byrne. “Beginning with the ‘pre-sale’ round, I am confident that prominent investors from around the globe will propel tZERO toward achieving its mission of bringing greater efficiency and transparency to capital markets.”

tZERO CEO Joe Cammarata said his company was disrupting a financial market ecosystem that was due for improvement;

“With this first ever regulated security token, we are entering a new world of capital formation that I believe will become Wall Street 2.0.”

Overstock shared a statement from Steven Nerayoff, Alchemist Founder and architect of the Ethereum ICO;

“tZERO’s ICO represents a watershed moment in the financial blockchain revolution. It’s backed by an all-star team of crypto and business pioneers. What makes tZERO a game changer is the team’s unique ability to fuse the traditional finance world with the bold, innovative crypto community. Alchemist is delighted to offer tZERO its extensive experience in counseling some of the most successful crowdsales in history on strategy, token economics, and compliance-related guidance.”

While tZero said the token would not be a Utility token, the company does expect the endeavor to provide certain additional benefits to holders of the Tokens in the future. These will not be a part of the terms and conditions of the Tokens, but rather benefits voluntarily provided by the Company to Token holders. These Discretionary Benefits may be withdrawn or changed at any time in management’s discretion or may simply never occur. It is an unknown.

Overstock said these possible Discretionary Benefits may take many forms including:

  • Discounts on certain products and services that the Company expects to offer in the future (including discounts on trading fees on a future Token Trading System;
  • For Token holders purchasing 100 Tokens or more, complimentary first year membership in Overstock’s rewards program, Club O, where available (not currently available outside the U.S.); and
  • Access to, and the degree of, any Discretionary Benefits, if offered, is expected to be determined by the quantity of Tokens the holder possesses. All matters relating to the terms of any Discretionary Benefits will be decided solely by the Board. Furthermore, the terms of any Discretionary Benefits will be subject to amendment by the Board at any time.


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