After multiple delays and suspensions of their token issuance, tZERO has once again stated that they will delay the STO until August. However, this time it came with additional information announcing that Private Equity firm GSR Capital based out of Hong Kong has signed a letter of intent to purchase up to $160 million of the tokens. This is significant as the goal they had previously announced was to issue $250 million worth of tokens. However, they have had challenges meeting that goal.
The launch of the token sale start at the top of the Cryptocurrency market which enticed investors to participate. However, as the market pulled back, so did the investors and the interest in the project. The Parent company, publicly traded Overstock.com, has had legal issues given the continued investor and regulatory scrutiny behind the project. They also have stated that they will not participate in the deal they once mentioned potentially buying up to $30 million in.
However, the project team has continued to make progress with the technology by adding to talent, acquiring companies that will be part of the ecosystem and creating partnership that will support their venture into the capital markets. They also announced that they have received over $90 million from over 1,000 investors as part of the token sale. They state that this makes tZERO “one of the most widely held security tokens globally.”
While Utility tokens have been very popular since Ethereum has facilitated the new process of crowdfunding, Security tokens are relatively new in the space as they follow securities law that are much more restrictive on who can participate and the disclosures needed by the issuer. A key distinction is that utility tokens are issued with no use other than the use of the issuer’s network while security tokens actually participate in the profits of the issuer. Many have closely tracked tZERO and its progress as it is thought to be a potential catalyst for the future of token issuances as blockchain technology continues to grow and disrupt many industries globally.
Will the delays on the issuance be worth the wait? Will the project ever complete its sale? Will they reach their goals? How will the issuance and launch of the platforms impact tokens in the future? How will it impact traditional financial markets? Lots of questions but truly interesting anyway you see. Let me know your thoughts below.
Image Source: https://www.startengine.com/tzero
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