Overstock Discloses Sec Probe Million Tzero ICO
Overstock has disclosed that US regulators are probing the $250 million tZero first coin offering (ICO) for possible violations of federal securities laws.
The filing stated that the SEC's enforcement division contacted Overstock in February and asked them to willingly hand over documents related to the construction of the tZero ICO. The company said it's currently in the process of responding to this request and plans to cooperate with the agency during the analysis.
From the filing:
«While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation doesn't mean that the SEC has concluded that anybody has violated the law. Additionally, the investigation does not mean that the SEC has a negative opinion of any person, entity, or safety.»
On Wednesday an explosive Wall Street Journal report demonstrated that the SEC had sent subpoenas to «scores» of ICO operators in a broad probe aimed at policing the nascent ICO fundraising industry, which regulators allege was used to circumvent federal regulations.
The report said that the SEC is eyeing simple agreements for futures tokens (SAFTs) with particular scrutiny, as it considers these token sale contribution arrangements have been used to bypass legislation governing securities trading.
Overstock has ran the tZero ICO under a simple arrangement for future equity (SAFE) — the investment instrument from which the SAFT was derived — aiming to raise $250 million to develop an SEC- and FINRA-compliant security market.
The business has said that tokens will bear characteristics of both a utility and a safety, as investors can either use them to receive discounts on stage trading fees or hold them to receive some of tZero's profits.
Notably, the filing, which replaces the original offering memorandum the company had distributed in December, gives prior investors the option to rescind their SAFE and receive a complete refund, though they've just five business days to fulfill their withdrawal rights.