tZERO, the fintech arm of online retail giant Overstock.com focused on blockchain technology, has embarked on a joint venture with RenGen and Argon Group to transform the Initial Coin Offering (ICO) market.

The companies have teamed up to launch an Alternative Trading System (ATS) for the trading of security tokens issued in ICOs in compliance with SEC and FINRA regulations (Joint Venture).

Blockchain-based digital tokens is a rapidly emerging asset class, witnessing tremendous growth. This is evidenced by the fact that these tokens have raised over $2 billion so far this year alone and cryptocurrencies overall (including digital tokens) have a current market cap of $137 billion.

However, global regulatory authorities including the U.S. Securities and Exchange Commission (SEC), the Canadian Securities Administrators (CSA), and the Monetary Authority of Singapore(MAS), among others, have recently issued guidance on how ICO tokens may be subject to securities laws. The SEC has 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.

The joint venture aims to redefine the way the ICO market looks at security tokens and enhance liquidity to accelerate development.

“tZERO has been at the forefront of the blockchain revolution for years, working closely with regulators since 2015 – launching the world’s first SEC compliant ATS for blockchain assets, the first private blockchain bond offering, and the first ever public issuance of a blockchain security,” said Patrick M. Byrne, CEO of Overstock. “Now, by combining our expertise with Argon's advisory services and RenGen's electronic trading, deep liquidity and market making capabilities, we are in a position to launch the only U.S. SEC compliant token trading venue.”

According to the official release, the joint venture will be built in an exclusive collaboration that draws on the distinct strengths of each company, combining tZERO’s blockchain-based trading platform with RenGen’s ability to provide liquidity, market making and algorithm technology, and the Argon Group’s premier ICO advisory experience and security token clients. It will also take advantage of SaftLaunch for AML and KYC capabilities.

“This Joint Venture allows us to continue achieving our goal of leveraging our existing U.S. equity market infrastructure and smart order routing technologies within the blockchain space,” said Joe Cammarata, President of tZERO.

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