The Intercontinental Exchange, parent company of the New York Stock Exchange, has launched a push into the digital trading space, announcing a “significant minority stake” in the blockchain-based trading platform tZERO.
ICE also announced David Goone, its chief strategy officer, will become the new Chief Executive Officer of tZERO effective next month.
The move marks a significant milestone in the adoption of blockchain-based trading solutions in the capital markets and a commitment from main-stream Wall Street firms in the space. The news follows a report that the NYSE has filed a patent to trade non-fungible tokens, or NFTs, a piece of unique digital property that often involves artwork, music, and sports memorabilia.
FOX Business has learned that the deal was brokered in large part by veteran investor Marc Cohodes who has been an outspoken advocate for bringing transparency to the markets for both institutional and retail investors.
tZERO, a subsidiary of Overstock.com, is an alternative trading system and broker-dealer designed to give investors access to private and public assets such as stocks and bonds as well as cryptocurrencies and NFTs.
As a blockchain-based platform, tZERO allows transactions and trades to be settled instantly, increasing transparency and efficiency for its users. Cohodes has recently taken up the cause of retail investors who believe big hedge funds are able to use the 3-day settlement time to illegally short stocks.
In a short sale, an investor borrows shares, sells them and hopes to make a profit by settling the trade at some later date when the stock falls. An immediate settlement date would be a major impediment to short selling.
tZERO has also partnered with BOX Digital Markets LLC to launch the nation’s first regulated blockchain-enabled securities exchange, known as the Boston Security Token Exchange (BSTX). The Securities and Exchange Commission approved BTSX in January and tZERO plans to use proceeds from its recent funding round to help further build out this platform which it plans to launch in the 2nd or 3rd quarter of this year.
“We believe the new capital infusion will allow the company to scale and continue its innovation in leveraging blockchain technology to create a more efficient and transparent Wall Street, ultimately revolutionizing and democratizing capital markets,” said Overstock.com CEO Jonathan Johnson.
