What Is Overstock's Cryptocurrency tZERO? What You Need to Know

Triston Martin Updated on Jun 03, 2022

Cryptocurrencies are virtual or digital currencies. Overstock.com (OSTK), a large online store, put out its cryptocurrency right away through an ICO. Overstock gave it the name tZERO. On December 18, 2017, when the ICO started, there was a lot of interest right away. ICOs are often used to get the money a project needs to keep going. The ICO for tZERO was the same, and it was meant to help pay for the development of the tZERO coin and a blockchain-based trading structure and platform. tZERO wants to find a way to solve problems with the availability of tokens while still following the rules for securities compliance. This article tells us “What Is Overstock's Cryptocurrency tZERO?”

The Journey to tZERO's ICO

Most COs last for about two days. But tZERO's stayed on the air for a few weeks at the beginning of 2018. Throughout January 2018, the team said many times that it would expand its ICO. It was officially over in August 2018. Some analysts thought that Overstock didn't get as much attention (or money) as it had hoped. The way the ICO was set up was also changed by Overstock. It was supposed to give a 100% bonus on the first $10 million that was bought during the offering, a 50% bonus on the next $40 million, and a 25% bonus on the next $50 million.

The business had hoped to raise $249.9 million via its initial coin offering (ICO), but it only received $133.9 million. It had planned to use the funds toward completing its blockchain trading platform as well as constructing systems in other countries. Overstock recently said that the Chinese private equity firm GSR Capital had provided the business with $375 million in funding.

Regulatory Compliance

As ICOs (Initial Coin Offerings) gained popularity worldwide, participation from US citizens in many of these offerings was routinely barred. This is because many of these tokens do not adhere to the regulations imposed on securities in the United States. Therefore, according to the guidelines set out by the SEC (Securities and Exchange Commission), securities were one of the essential components of tZERO's declared purpose.

In its whitepaper, tZERO wrote that the tokens themselves "will not be registered under the U.S. Securities Act of 1933." But the company planned for the ICO to be done legally. This was in line with tZERO's goal of making a token that is a mix of traditional security and a cryptocurrency because it has the rights, protection, and safety of conventional security as well as the utility and flexibility of a cryptocurrency or token.

Benefits to Coin Holders

People who buy tokens get several benefits in exchange for their money. They could purchase digital receipts that used blockchain that showed where they were. Traders who make short sales can use a DLR to find and borrow the shares they want to trade against. The company's president, Joseph Cammarata, said that the process was like a store where people could learn about the product and cryptocurrencies in general.

Patrick Byrne, the founder of Overstock and its former CEO, said that big investors like George Soros bought warrants for tZERO tokens before the ICO launch of tZERO in August 2015. tZERO was created as a subsidiary of Overstock.com. Patrick Byrne, who has been a big fan of Bitcoin for a long time, sold his company shares, which were worth about $90 million, and put the money into Bitcoin and precious metals. In 2019, he gave up his job as CEO of Overstock.

tZERO Controversy

Since its ICO (Initial Coin Offering), there have been minor conflicts around tZERO. According to Byrne, around $100 million was contributed to the token launch by 2,000 certified investors on the very first day following the debut in December of 2017. However, as was indicated above, additional sources said that as of February 2018, the ICO target of $300 million had only been raised by $49 million of the total amount.

Since the ICO was made longer, Overstock has had many problems. The company's stock fell by 88 percent from its high of $86.90 per share on January 8, 2018. On November 2, 2019, each share of stock was worth about $10. This could be because of the ICO and especially because the public might think that the fact that the ICO was extended shows that investors aren't interested in the market as a whole. Even though tZERO has set high goals for itself, it's still not clear what will happen to the token and platform in the future.