According to Byrne, the tZero ICO is will only be raising a total of $250 million. They might raise the upper limit to $300 million if needed. This initial coin offering is going to be structured a little differently in various regards, which makes it all the more interesting. First, the project is going to be opening up the first portion of its fundraiser to, what the company is calling, strategic purchasers, in which the company will be entering into Simple Agreements for Future Equity (SAFEs), these strategic purchasers are accredited investors. Then they will also have the fundraiser open to offshore investors as well.
The raise has attracted significant interest across the board, as it has drawn more than 1,500 people to open up their virtual wallets and invest, giving this particular ICO a lot of traction from the start, allowing them to raise the aforementioned $100 million in such a short timespan.
The CEO went as far as to note that he was fielding for offers from individual investors for $3 million and higher amounts for their single token allocations.
They are following regulations all throughout the offering and so, are not participating in tactics, or are at least, shying away from discussing tactics during the sale. He did note that if they were to go that route, they would be reserving them in a tiered manner starting with the first ten million sold. Then the next would be going to following $90 million. He did state that those investors who fall in the first three tiers would be receiving the bonuses if they were to go down that route.
The investors can also expect to have full information on how to be a part of the platform via their site, SAFTLaunch.com, the offering’s issuance portal.
More good news for the team
“There seems to be overwhelming demand, and we don’t need more than $250 million to do all the disruption we plan on doing,” Byrne shared after the launch of the ICO. “I wish we could make it for everybody.”
The “disruption” that Byrne referred to largely pertains to tZero’s business model and how it could change trading as we know it.
Byrne started with the same mindset in the way that he decided to introduce the company’s initial offering, not conventionally – as is expected from a company of its stature – but through an ICO.
ICOs get a bad name due to some of the process offerings turning out as being fraud. To add to their troubles, they are somewhat complicated for those people who are oblivious with the process. Due to this reason, the Securities and Exchange Commission (SEC) has been cracking down on those ICOs which seem to be misleading or fraudulent to the investors.
However, Byrne maintains that he appreciates the recent crackdowns, comparing them to instances of people driving around “with stacks of stock certificates, selling to Grandma over the backyard fence” in the past. According to Byrne, some level of “paternalism” is necessary to ensure that everything stays transparent and is adapted for best-practices.
What are this ICO and Tzero about?
The coins offered in the ICO serve as tokens to use the tZERO trading mechanism.
The platform, in turn, has been developed with the aim to host future ICOs, trading, and short-selling. It aims to operate as a blockchain-based solution as an answer to the more traditional Wall Street exchange – ambitiously and potentially as an alternative to the NYSE. This could also be the “disruption” that Byrne was speaking of earlier.
Owners of the tokens obtained through the ICO will obtain a dividend-like revenue share from tZero in addition to the ability to use the token in the exchange for trading and shorting.
As per Byrne, some of the benefits of this hybrid-model over traditional exchanges are transparency through a distributed ledger and lower costs.
Initially, the platform is to trade its own tZERO token, but it plans to expand from there. This goes in line with Byrne’s vision as well, according to whom, tokens are the future of securities with ICOs replacing IPOs.
Byrne has also mentioned that tZERO is completely SEC compliant and aims to decrease the cost of transactions in this market by at least 75%, potentially reaching reductions of 90%. It would also contribute toward a disruption in the securities lending market, which is a vehicle that fuels short-selling and provides substantial revenues for traditional brokers.
Announcement to purchase a percentage of StockCross & Kennedy Cabot Acquisition
The CEO has also recently announced the intention of the tZERO to buy a small stake in a company called StockCross Financial Services, Inc., a DTC Clearing firm. The two groups involved have already started the process to begin the purchase by putting forth their LOI’s for the tZERO to buy about 24% of the clearing firm.
On the purchase, Byrne commented, “As we have told the world, we intend to leverage our expertise to develop a trading platform capable of trading security tokens, and we expect clearing capabilities to be central to this endeavor. Today, we take the first step toward integrating a clearing function into the tZERO ecosystem.”
He further noted that day marks “a culmination of a Herculean effort” between the tZERO team and the Gebbia companies to start a recreation of the old Wall Street. He also mentioned that this would a major step in bringing crypto capital markets to the world further adoption and growth.
tZERO has also signed an LOI for the smaller purchase of Kennedy Cabot Acqusition, LLC.