tZERO Group Inc., a technology solutions provider for capital markets, announces that the full tokenization of its Series-A Preferred Equity Security (TZROP) is complete and, at the time TZROP was “fully tokenized, it became the first digital asset security to be custodied by tZERO’s Special Purpose Broker-Dealer, tZERO Digital Asset Securities, one of only two digital securities broker-dealer custodians in the US.”
David Goone, tZERO’s CEO said:
“Today we move forward on our journey of innovation. As we continue to fulfill our vision for TZROP and our trading ecosystem, we will remain steadfast in our commitment to advancing new and innovative technologies in a regulated environment.”
At the time of the full tokenization of TZROP, tZERO also deployed new utility features “programmable into the security’s new upgradable smart contract technology.”
These issuer tools include artificial intelligence (AI) data driven insights relating to TZROP’s “ownership structure, transactions and investor base, while maintaining data privacy.”
Alan Konevsky, Executive Vice President and Chief Legal & Corporate Affairs Officer of tZERO said:
“As one of only two special purpose broker-dealer in the US, the commencement of our digital asset security custodial services is not only meaningful for tZERO, but the entire digital asset industry. We will work to make a positive use case for this regulatory sandbox, while working with regulators, such as the SEC’s new crypto task force, so that positive updates can be made to the permitted activities of special purpose broker-dealers.”
tZERO plans to leverage the upgradable technology powering TZROP to bring additional utility features “to its investors in the future, which may include individual customer custodial wallets, on-chain KYC verification and accreditation or automated on-chain corporate actions, without sacrificing data privacy standards.”
As covered, tZERO Group, Inc. and its “broker-dealer subsidiaries provide a liquidity platform for private companies and assets.”
They offer institutional-grade solutions for issuers looking to “digitize their capital table through blockchain technology, and make such equity available for trading on an alternative trading system.”
tZERO, through its broker-dealer subsidiaries, democratizes “access to private assets by providing a simple, automated, and efficient trading venue to broker-dealers, institutions, and investors.”
As noted in the update, tZERO Digital Asset Securities, LLC is “a broker-dealer registered with the SEC and a member of FINRA and SIPC.”
It is the broker-dealer custodian of all digital asset securities “offered on tZERO’s online brokerage platform.”
It operates in accordance with the SEC’s statement, regarding the Custody of Digital Asset Securities by Special Purpose Broker-Dealers.
As clarified in the update, digital asset securities may not be “securities” as defined under the Securities Investor Protection Act (SIPA)-and in particular, digital asset securities that are “investment contracts” under the Howey test but are “not registered with the Securities and Exchange Commission are excluded from SIPA’s definition of “securities”-and thus the protections afforded to securities customers under SIPA may not apply.”
tZERO Securities, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC.
It is the operator of the tZERO Securities ATS.