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Lets look at the Big Exchanges of the Future: Episode 1 TZERO
As many of you know, that we have been looking a lot more into security tokens, how they work and why they are so interesting. In the last article we explained the overall structure of what Security Tokens are and why they are more useful then utility Tokens.
Security in short is a tradable financial instrument that holds a monetary value. Creating a Security token has been rather difficult, and most companies avoided going through all the regulatory hoops and invited a “Usecase” and stamped their Coin as a utility Token.
Utility Tokens as the name implies are just tokens that have a usecase. To make it easier for you guys to understand the difference I like to use the following example. Imaging you go to Starbucks and they made a Coffee Coin. This coin is used like a gift care or a loyalty program. You store it on the Starbucks Wallet that you downloaded on your phone and go in and buy a cappuccino. At the same time you also own Starbucks Stocks and have them shown in some portfolio app, which you also have on your phone.
The big difference between those two would be that you wouldn’t expect that you Coffee Coins increased in value, where as you would hope to make some returns on the Startbucks stocks. Now if you put the data of who owns what amount of shares of the Starbucks stocks a Blockchain, a distributed Ledger, well then you get a Security Token.
Now we can look into Security Token Exchanges. Security Tokens can Only be traded on such exchanges from verified wallets. Therefore up until recently NOBODY made security Tokens because there were no exchanges. Why is that? Well most people think opening an utility token exchange will make them rich, (which is not the case 99% of the time), and its very cheap to do so. On the other hand, there are very few securities out there that can be traded in the first place. Opening a Securities Exchanges is a long and expensive process. So far only a handful of Teams chose the hard way and started building a fully compliant Security Token Exchange.
TZero , a blockchain subsidiary of e-commerce retail giant Overstock
Overstock.com is an online retailer that sells a wide range of goods. At its origins, it was a platform for selling the surplus of electronic goods or those which had been returned, but it then started to offer new products, which have attracted more of the public. The platform was founded in 1999 by Patrick Byrne, who is the current CEO of the company. The company is headquartered in the USA. In 2014, it became the first major retailer to start accepting Bitcoin as a form of payment.
TZero has created a modular, adaptable platform. The platform integrates with trade participants to create a real-time, authenticated, immutable ledger. That ledger can host ICOs that are compliant with FINRA and SEC regulations to bring the platform to life, TZero partnered with RenGen LLC and the Argon Group.
“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,” explains Dr. Patrick M. Byrne, CEO of Overstock.
“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.”
While tZERO originally limited the maximum amount of tokens to $250 million, it is currently unclear how much it raised during the round. In June, tZERO signed a letter of intent with Beijing-based investment company GSR Capital for the purchase of $160 million in tZERO Security Tokens at a price of $10.00 per token.
In 1999, Patrick M. Byrne launched Overstock.com. In 2016, Overstock had revenues of $1.8 billion. In 2012, Byrne’s pro-freedom political orientation challenged Overstock to become the first online retailer to accept bitcoin for payments. In 2015, Byrne used Medici’s t0.com trading platform to become the first person to purchase a digital bond entirely on the blockchain, and in 2016 Overstock was the first company ever to issues shares of a public company on an ATS.
Saum Noursalehi is the CEO of tZERO, a global leader in the development and commercialization of blockchain-based financial technology. As CEO, Noursalehi’s focus is on accelerating the implementation of tZERO’s fintech products, including its Security Token Trading and Digital Locate Receipt platforms, as well as the creation of the industry’s first regulated Security Token exchange.
Prior to this role, Noursalehi served as president of Overstock’s retail business, where he leveraged data and technology to provide customers the best price, assortment, and convenience in the rapidly expanding home goods category. Noursalehi is also a member of Overstock’s Board of Directors, to which he was elected in 2017.
During his tenure as Overstock’s president, Noursalehi led the introduction of machine learning and artificial intelligence to create market-leading efficiencies while also providing customers with a personalized shopping experience.
Noursalehi has also been responsible for the creation of several other core technologies for Overstock since joining the company in 2005. These advancements include in-house search and recommendation engines, product sort algorithms, and a vendor application designed to optimize product content. He also spearheaded the implementation of automated email campaigns based on customer behavior. Additionally, he led a full redesign of both the desktop and mobile websites, and oversaw the development of Overstock’s mobile apps, which have won six consecutive Mobile Web Awards from the Web Marketing Association, as well as the 2018 Appy for Best Retail App.
Before joining Overstock, Noursalehi worked as a software engineer at the Utah Administrative Office of the Courts, Brooks Automation, and technology startup Infopia. Noursalehi received a Bachelor’s Degree in Computer Science from the University of Utah, has been profiled in publications such as Wired, and was a recipient of the 2015 Utah Business Forty Under 40 award honoring Utah’s top up-and-coming professionals.
RALPH DAIUTO, JR.
COO & General Counsel
Daiuto, Jr. is an accomplished attorney and business leader with over two decades of experience in the securities industry, managing several broker-dealers and innovative technology companies and overseeing their daily operation, including legal, compliance, and regulatory matters. Ralph is currently the COO and General Counsel tZERO. He is admitted to practice law in the states of NY and NJ, as well as the U.S. District Courts in the Southern and Eastern Districts of NY and the District of NJ.
Amit Goyal is tZERO’s Chief Technology Officer, responsible for leading the development and implementation of blockchain, cryptography, and other technologies for the company’s revolutionary distributed ledger capital markets platform.
Goyal joined tZERO from Overstock.com, where, as Senior Vice President of Product and Engineering, he oversaw a team of more than 300 technologists leading the department in software engineering and architecture. Goyal’s teams have been behind the creation and implementation of technology including augmented reality, virtual reality and machine learning. Additionally, in his more than a decade with the multi-billion dollar e-commerce leader, Goyal built fulfillment systems, managed software technology for OLabs, Overstock’s emerging business incubator, and managed product technology for website and mobile sites.
In 2017, Goyal was named as the chair to the VR/AR Association (VRARA)’s global retail and e-commerce committee and helped form VRARA’s Utah chapter of which he serves as president.
Goyal received his Bachelor’s of Engineering from Punjab Technical University.
Mr. Quall is the Chief Financial Officer of tZERO. Prior to joining tZERO, Mr. Quall worked ten years for Virtu Financial Inc. and predecessor companies, KCG Holdings, Inc. and Knight Capital Group, Inc. (collectively “Virtu”) where he was responsible for all controllership and accounting functions for the parent company, BondPoint, a fixed income electronic trading platform and HotSpot FX, a foreign currency electronic trading platform. Prior to Virtu, Mr. Quall was the manager of technical accounting and internal control of MarketAxess Holdings, Inc., an electronic trading platform of fixed income securities. Mr. Quall is Certified Public Accountant in New York State, a Chartered Global Management Accountant and holds a Series 27 securities license. For three years, Mr. Quall served as a Director of the New York State Society of CPAs. Mr. Quall began his career at the accounting firm of Deloitte LLP, where he was a Senior Manager.