Overstock’s tZERO Stock Goes Live, But Will Only Be Available During Traditional Market Hours
Overstock has been in the process of getting into the cryptocurrency world, which they’ve finally done with their security token tZERO. While it is finally live, as of Thursday afternoon last week, it does not look like consumers will have the flexibility for trading this token like others on the market. At least for now, Overstock will only be allowing the use of their tokens from 9:30am to 4:00pm EST, which is just a typical day for Wall Street.
The first purchase of tZERO tokens on the market came in at $8 lower than the security offering that Overstock hosted, which was originally $16 each. Presently, the tZERO orders can only be seen by approved users, who can also see bids and asks. CEO Saum Noursalehi took to CoinDesk to discuss the launch’s first few hours, along with other details about their approach in offering the coin to the public.
Noursalehi said, “Our approach has been incremental: getting some benefits of blockchain but not going full-blown, and this is also something that made the regulators comfortable with letting us move forward. Initially we did it to kind of mimic the market, but Dino is our broker-dealer at this point, and we wanted to make sure there is support available for investors during the broker’s business hours.”
The launch came with technical issues as well, though the CEO says that the individual events have been “minimal.” Elaborating, he said, “For example, during the AML/KYC checks we had a lot of rules in place, so there were too many applications going through the manual review. We helped them [Dinosaur] to tune those rules so that they don’t have to manually review so many applicants.” Dinosaur is a broker-dealer, and it explicitly operates from 9:30am to 4:00pm EST. Furthermore, investors were instructed that, to gain control of their tokens, they would need an account with Dinosaur, which lets them participate in trading.
The tZERO token does not operate like other coins on the blockchain since it is created as a trading venue that doesn’t have to abide by the same regulations as an exchange, or an alternative trading system (ATS). There is no policing of the participants' actions, and a broker-dealer handles almost everything.
Overstock’s chairman Patrick Byrne does not plan to stop there, as he wants to completely change the way that security trading systems presently operate. As such, the next goal in Byrne’s sights is to launch an exchange meant for the traditional, publicly-traded stocks. The efforts for such a marketplace were announced in May after confirming a partnership with BOX Digital Markets.
Noursalehi confirmed that the company is making progress towards that effort, and that the technology stack would match what they are using with tZERO. If completed in time, this would be the first exchange to offer trading for this specific type of crypto asset. Noursalehi added,
“As companies become publicly traded, they would move from our ATS (tZERO) to BSTX exchange.”
Though profits will obviously be a priority, the big numbers are not the most important goal at the moment. Noursalehi said,
“We’re going to shift to more monetization later. At this point, it’s more about proving the concept and driv[ing] adoption.”