Overstock (NASDAQ:OSTK) subsidiary tZERO and BOX Digital Markets LLC are partnering to launch the industry’s “first regulated security token exchange.” tZero was the first crypto focused platform to receive regulatory approval to operate an Alternative Trading System (ATS) – thus enabling the company to trade security tokens at some point in the future.
Box Options Exchange is jointly owned by the TMX Group (Think Toronto Stock Exchange operator) and a group of broker/dealers. BOX currently lists more than 1500 security options.
Earlier this week, the two companies entered into a letter of intent (LOI) to form an exchange (ATS) to list and publicly trade security tokens for companies that issue, or convert existing stock to, security tokens. According to tZero, the joint venture would be equally owned by them and BOX Digital, with each having equal representation on the Board of Directors, together with one mutually agreed upon independent director. Lisa Fall, who currently serves as CEO of BOX Digital and as president of BOX Options Exchange LLC, would be the CEO of the joint venture.
tZero said it plans to contribute cash and to license their blockchain technology to operate the crypto marketplace. BOX will provide its experience and personnel toward obtaining regulatory approval to operate the market. tZero said that approval from the Securities and Exchange Commission will be sought following the final approval of the JV.
Saum Noursalehi, the recently appointed CEO of tZERO, said their partnership is a significant milestone that will create the first SEC regulated cryptocurrency exchange;
“Lisa Fall’s leadership, reputation and deep experience in the regulated securities exchange industry will be a major asset in achieving this objective. Together, we will continue to work with the SEC as we develop a first-of-its-kind platform that will integrate blockchain capital markets into the current U.S. National Market System.”
“tZERO’s track record and accomplishments in this innovative area, coupled with BOX’s expertise in operating a highly efficient and transparent equity options marketplace, made partnering together an easy decision and we look forward to building a world-class platform for listing and trading security tokens.”