Overstock’s tZERO unit announced Friday (Dec. 22) it was acquiring a minority stake in StockCross Financial Services, a DTC clearing firm.
“As we have told the world, we intend to leverage our expertise to develop a trading platform capable of trading security tokens, and we expect clearing capabilities to be central to this endeavor,” said Patrick Byrne, CEO of Overstock and tZERO chairman, in a press release announcing the acquisition.
Under the terms of the deal, tZERO will take a 24 percent interest in StockCross for $12 million. Upon closing, the shareholders of StockCross have agreed to reinvest $3 million into StockCross, the companies said. Additionally, pursuant to the Siebert (SIEB) and StockCross agreement announced in the spring, tZERO’s stake will entitle the company to a one-time distribution of approximately 1.2 million shares of SIEB.
Recently, tZERO signed a letter of intent to acquire a 1 percent stake in Kennedy Cabot Acquisition, the majority shareholder of Siebert Financial Corp.
Earlier this week, Medici, the blockchain unit of Overstock.com, announced the launch of tZERO, an alternative trading system (ATS) that is creating a platform to exchange cryptocurrency tokens in the U.S. According to a report in CoinDesk, the first-of-its-kind ATS will be regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Medici is teaming up with RenGen, a FinTech that will act as the market maker, and Argon Group, an investment bank focused on ICOs, to offer the ATS.
Rather than relying on broker-dealers to buy and sell securities, tZERO hooks up buyers and sellers in a so-called dark pool. The idea is to develop an alternative to the NASDAQ using blockchain technology that is open and transparent.