Government Law Enforcement Money Laundering

SEC Overstock Review: SEC wants to know Everything About $250 Million tZero ICO

The U.S Securities and Exchange Commission (SEC) is conducting a review of companies that have turned to ICO to finance their blockchain projects. A recent filing released the details of the ongoing $250 million ICO. The Company hopes to finance a new product, the tZero alternative trading system.

The SEC review does not concentrate on the ICO only, but the company in general. According to a Bloomberg report, Inc. CEO Patrick Byrne said that the Securities and Exchange Commission wanted to know every detail of the company’s Initial Coin Offering. This extends to the company history, advisory board, sale structure, Investor awareness and details of its blockchain-subsidiary tZero.

However, no legal proceeding with adverse impact has been filed against overstock as the company has been under review since February. On Thursday, Overstock disclosed details of the SEC probe stating the agency asked the company to provide information relating to tZero ICO. Byrne further clarified that the company did not receive a subpoena.

The tZero ICO

Overstock later confirmed it had concluded its first round, the ICO pre-sale raising $100 million and has started its subsequent fundraising round. It will shift from SaftLaunch to StartEngine to manage its crypto token sales. StartEngine was initially developed to manage equity crowdfunding management.

According to a Coindesk report, tZero president Joseph Cammarata the switch decision was a result of regulatory concerns. Long and complicated compliance process at SaftLaunch such as; anti-money laundering (AML) and know your customer (KYC) led to delays as the ICO was gaining momentum leading to an extension of tZero token pre-sale.

A SaftLaunch representative confirmed the delays, saying:

“Because of strong demand, there was an initial backlog in managing inquiries from interested investors, but there is no backlog now, and the offering remains open.” Coindesk

The platform shift will not affect pre-sale investors as they can continue using SaftLaunch, but investors in the subsequent round will transact through StartEngine.

Overstock confirmed it has an agreement with over 1000 token buyers for over $110 million tokens and doesn’t guarantee that it will ever issue the tokens. The company shifted from SAFTs contracts – simple agreements for future tokens to SAFEs contacts – simple agreements for future equity. The NAFTs or SAFEs are a promise (agreement) of token allocation to token buyers if “they are ever issued.”

The Amount Raised

tZero ICO pre-sale amount speculation gained momentum from delays. Skeptics asked questions about tZero success in raising the $100 million it claims. Some estimated $49 million as the correct amount based on the latest SEC filings and other speculated as low as $18 million.

According to Coindesk, Cammarata clarified:

“One thing that I’d like to make clear is we’re over $100 million and Overstock has not put anything in the ICO at this time. They have not bought any tokens or made any investments at this time.”

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Sam, has been a great contributor to the cryptonewsbytes team since 2017. He is also a crypto-enthusiast and talented market analyst. In his free time, you will find him traveling and exploring new places.

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