tZERO Receives Landmark Approval To Custody Digital Securities and Support End-to-End Digital Securities Lifecycle in the United States
SEC and FINRA approval caps off a multi-year effort to provide end-to-end support for digital asset securities from trading to settlement; revolutionizes innovative digital infrastructure and blockchain technology through a new and unique tZERO special purpose broker-dealer subsidiary approved for digital asset custody in compliant securities environment approved by the U.S. regulators
Expected to launch in Q1 2025 with the full digitization of TZROP
SALT LAKE CITY, Utah, Sept. 10, 2024 /PRNewswire/ – tZERO Group Inc., a leader in technology solutions for capital markets, proudly announces the respective Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) approval of tZERO Digital Asset Securities as a new Special Purpose Broker-Dealer for digital asset securities custody.
This is only one of two licenses for a regulated broker-dealer digital asset security custodian that have been approved in the United States since the rules were introduced by the SEC in 2020, serving as a major milestone in tZERO’s continued journey toward the development and adoption of securities that will unleash the full potential of blockchain technology for a range of assets, including private securities, securitized real estate, art, sports and other Real World Assets and funds.
Prior to this approval, compliant digital security issuers were faced with the choice of greatly limiting or sacrificing blockchain technology features, taking their assets outside of the United States, adopting nuanced or unsupportable regulatory positions or, being unable to enable their investors to securely custody their digital asset securities with a regulated broker-dealer, relying on cumbersome workarounds with non-broker-dealer custodians.
Now, such issuers can fully utilize the power of transformational blockchain infrastructure and engage with tZERO as a one-stop shop for digital asset security issuance and a range of compliant secondary trading modalities, including continuous automated trading, auctions and block trades for a range of private assets. This step further advances tZERO’s long-standing position that many digital assets in the market constitute securities under existing legal frameworks and require fully-developed infrastructure, including broker-dealer led custody, to effectively exist and migrate into a regulated securities environment.
“We have arrived at a monumental and positive inflection point in the tZERO story,” said David Goone, the Chief Executive Officer (CEO) of tZERO. “We have been steadfast in our belief that blockchain technology is the next-generation proponent of powering capital markets. Our special purpose broker-dealer status will enable us to offer safe, secure and regulated broker-dealer digital asset custody and other new and innovative products for issuers, investors and other market participants alike.”
tZERO’s long-standing technology services and SEC-approved transfer agent unit can assist issuers to issue and transfer digitally native securities on a blockchain, and, critically, use smart contract automation to power a range of functions.
After issuance and any relevant regulatory holding periods, investors can enjoy a path to liquidity in one seamless trading environment on the tZERO Securities’ ATS, with custody, clearance and settlement by way of tZERO’s newly approved Special Purpose Broker-Dealer, eliminating the need for third party custodial relationships and balkanized, expensive and inefficient infrastructure.
“tZERO’s greatest differentiators have been its commitment to innovation from within a regulated brokerage ecosystem, advancing change through iterative and incremental regulatory engagement and through our continuous work with the agencies,” said Alan Konevsky, Executive Vice President and Chief Legal & Corporate Affairs Officer of tZERO.
“Now, as a result of this effort and philosophy, we are at the very avant-garde of regulatory innovation in the United States as one of only two broker-dealers entrusted by the regulators to custody digital asset securities. We will leverage this unique opportunity, on behalf of the digital asset industry at large, to illustrate how positive regulatory clarity can produce real-world innovation, novel products and real commercialization across of range of traditional financial and real world assets — as we advance towards an integrated regulated infrastructure layer and connective tissue for compliant digital assets,” added Konevsky.
tZERO and its broker-dealer subsidiaries expect to bring this new service to market in early 2025, starting with the full digitization of tZERO’s Series-A preferred equity security (TZROP) and other potential issuers.
TZROP was issued in a private placement in August 2018 and, in January 2019, it pioneered the way for private securities to trade on the tZERO Securities ATS on a regulated, continuous and automated marketplace. Now tZERO’s flagship trading asset will be the first digital asset security to be traded on the tZERO Securities ATS, demonstrative of how this regulatory approval will positively upgrade the tZERO Securities ATS trading ecosystem.
For more information about tZERO and its services, please visit https://tzero.com.
About tZERO
tZERO Group, Inc. (tZERO) and its broker-dealer subsidiaries provide an innovative liquidity platform for private companies and assets. We offer institutional-grade solutions for issuers looking to digitize their capital table through blockchain technology, and trade on a regulated alternative trading system. tZERO, through its broker-dealer subsidiaries, democratizes access to private assets by providing a simple, automated, and efficient trading venue to broker-dealers, institutions, and investors. All technology services are offered through tZERO Technologies, LLC. For more information, please visit our website.
About tZERO Digital Asset Securities
tZERO Digital Asset Securities, LLC is a broker-dealer registered with the SEC and a member of FINRA. It operates in accordance with the SEC’s statement, dated December 23, 2020, regarding the Custody of Digital Asset Securities by Special Purpose Broker-Dealers. More information about tZERO Digital Asset Securities may be found on FINRA’s BrokerCheck.
About tZERO Securities
tZERO Securities, LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. It is the operator of the tZERO Securities ATS. More information about tZERO Securities may be found on FINRA’s BrokerCheck.
About tZERO Transfer Services
tZERO Transfer Services, LLC is an SEC-registered transfer agent. More information about tZERO Transfer Services may be found on Edgar.
Investor Notice
Digital asset securities, as well as any particular investment, may not be suitable or appropriate for everyone. Investors should note that investing or trading in securities could involve substantial risks, including no guarantee of returns, costs associated with selling and purchasing, and no assurance of liquidity which could impact their price and investor’s ability to sell, and possible loss of principal invested. There is always the potential of losing money when you invest in securities. There are also unique risks specific to digital asset securities, including, without limitation, fraud, manipulation, theft, and loss.
No Offer, Solicitation, Investment Advice or Recommendations
This release is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, nor does it constitute an offer to provide investment advisory or other services by tZERO or any of its affiliates, subsidiaries, officers, directors or employees. No reference to any specific security constitutes a recommendation to buy, sell, or hold that security or any other security. Nothing in this release shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this release constitutes investment advice or offers any opinion with respect to the suitability of any security, and the views expressed in this release should not be taken as advice to buy, sell or hold any security. In preparing the information contained in this release, we have not taken into account the investment needs, objectives, and financial circumstances of any particular investor. This information has no regard to the specific investment objectives, financial situation, and particular needs of any specific recipient of this information and investments discussed may not be suitable for all investors. Any views expressed in this release by us were prepared based upon the information available to us at the time such views were written. Changed or additional information could cause such views to change. All information is subject to possible corrections. Information may quickly become unreliable for various reasons, including changes in market conditions or economic circumstances.
Forward-Looking Statements
This release contains forward-looking statements. In addition, from time to time, tZERO, its subsidiaries, or its representatives may make forward-looking statements orally or in writing. These forward-looking statements are based on expectations and projections about future events, which is derived from currently available information. Such forward-looking statements relate to future events or future performance, including financial performance and projections; growth in revenue and earnings; and business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including, without limitation: the ability of tZERO and its subsidiaries to change the direction; tZERO’s ability to keep pace with new technology and changing market needs; performance of individual transactions; regulatory developments and matters; and competition. These and other factors may cause actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this release and other statements made from time to time by tZERO, its subsidiaries or their respective representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions. tZERO, its subsidiaries, and its representatives are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this release and other statements made from time to time by tZERO, its subsidiaries or its representatives might not occur.
SOURCE tZERO
