Sept. 27, 2017
Overstock.com Inc. subsidiary tZero, RenGen LLC and the Argon Group have announced a joint venture to launch an alternative trading system for ICO tokens that complies with SEC and FINRA regulations.
According to a press release, the joint venture will be developed as a collaborative effort that draws on the distinct strengths of each company.
The partners intend to combine the blockchain-based trading platform of tZero, the market-making and algorithm technology of RenGen, and the ICO advisory experience and security token clients of Argon Group. The joint venture will also employ the AML and KYC capabilities of SaftLaunch, the release said.
The joint venture aims to redefine the way the ICO market views security tokens, and to enhance liquidity to accelerate market development. Lack of liquidity has been a significant impediment to security token market development, the release said.
This topic has received much attention since the issuance in July of the SEC Report on the DAO, which made clear that any digital token with an income stream is a security, and furthermore, that security tokens may only be traded on an ATS or a National Securities Exchange.
"We have long been advocating that issuing digital tokens as securities gives issuers and purchasers the greatest certainty about the legal regime that applies to the sale and the widest range of options to provide an attractive return for investors," Argon Group CEO and General Counsel Emma Channing said in the release. "The key issue to date has been the need for an appropriate marketplace to provide liquidity. This joint venture between tZero, RenGen and Argon has the potential to completely change the face of ICOs."
Digital tokens and cryptocurrencies are changing the face of emerging growth company financing, the release said. According to a CNBC report, in the first half of 2017, more money was invested in fintech through cryptocurrencies than through venture capital.
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