- tZero has been granted a U.S. special purpose broker-dealer license, making it the second crypto company to do so
- This new license enables tZero to take custody of digital asset securities under SEC oversight.
- The first crypto firm to achieve this was the much-discussed Prometheum
tZero Group Inc. has recently secured its registration as a special purpose broker-dealer under the US Securities and Exchange Commission (SEC). This milestone allows tZero to provide custody for digital asset securities, mirroring the earlier achievement of Prometheum Inc., which has been the subject of much debate in the crypto actor. The registration is crucial as it permits the firm to operate within the SEC’s framework for handling crypto assets classified as securities.
tZero to Use License to Expand
tZero launched in June 2019, funded and run by Overstock and its then-CEO Gabriel Byrne. In the years since it has tokenized a wide variety of assets, including an Aspen hotel and luxury apartments, which it sold on its exchange.
Having initially gotten off on the wrong foot with the SEC, tZero seems to finally have won the agency round, securing a special purpose broker-dealer license which allows tZero to expand its services in the growing field of digital assets.
According to current CEO David Goone, the license will enable them to “offer safe, secure, and regulated broker-dealer digital asset custody.” In addition to its trading platform, tZero will now be able to handle the custody, clearance, and settlement of digital assets. The firm is expected to roll out services early next year, starting with its own Series-A preferred equity security, TZROP.
It also plans to expand its services related to private securities, securitized real estate, art, and sports assets. With growing regulatory oversight, obtaining a broker-dealer license is becoming increasingly important for firms looking to offer compliant digital asset services.
Not in Illustrious Company
tZero’s license is the latest chapter in the ongoing saga that is the crypto industry’s legal battle with the SEC over whether digital tokens should be classified as securities. Companies like tZero and Prometheum, however, will treat these tokens as such under the terms of their registration.
tZero’s name joins that of Prometheum in the SEC’s broker list, a company that drew suspicion last year when its co-founder and its co-CEO Aaron Kaplan earned a seat at a United States House Financial Services Committee hearing, where he testified in support of the SEC’s approach to crypto regulation, only for his rationale, and even his answers themselves, to be ripped apart by observers.
