Second U.S. Firm tZero Said to Become Crypto Broker Dealer Under SEC Oversight

As a seasoned researcher with a penchant for deciphering the complexities of the financial world, I find myself intrigued by the latest developments at Overstock-backed tZero Group Inc. The company’s strategic move to join Prometheum Inc. as one of two U.S. special purpose crypto broker dealers is not just a leap forward for tZero, but potentially a game-changer for the digital asset industry.

Another firm, Tzero Group Inc., announced that they have become fully licensed as a broker-dealer in the United States. This was made possible through a regulation that allows cryptocurrency companies to gain entry into this category, much like Prometheum Inc. did before them.

Obtaining registration as a special purpose broker-dealer under the supervision of the U.S. Securities and Exchange Commission enables the firm to hold customers’ digital asset securities. However, this capacity puts the company in the midst of an ongoing legal dispute within the industry regarding the SEC’s view that most cryptocurrency tokens are considered securities. In order to hold crypto securities, tZERO and Prometheum must classify tokens as securities, a classification that many issuers are resisting.

In a statement, tZero CEO David Goone explained that our unique status as a special purpose broker-dealer allows us to provide secure, reliable, and government-regulated digital asset custody, along with other cutting-edge products for issuers, investors, and all market participants, all in a safe and secure manner.

Previously, our company established a trading platform, commonly referred to as an Alternative Trading System (ATS). With this new license, we can now handle functions like custody, clearing, and settlement all under a single roof, as stated.

The Securities and Exchange Commission (SEC) did not provide an immediate response regarding the request for comment and verification about tZero’s recent change in status.

Currently, at this moment, the Financial Industry Regulatory Authority hasn’t provided clarification about tZero’s approval through its BrokerCheck service, which means the differences in their licensing between Prometheum and tZero remain vague. However, previous filings have shown that tZero is authorized to carry out private placements of securities and to operate a trading platform for digital asset securities on its Alternative Trading System (ATS).