Hong Kong VC Invests $160 Million in Overstock-Backed tZero ICO
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A Hong Kong-based venture capital firm is placing a major bet that tZero, a security token exchange owned by e-commerce company Overstock, will prove to be a central hub in what blockchain visionaries have termed the “tokenization of everything.”
GSR Capital, which also has offices in Beijing and Silicon Valley, has entered into an agreement to purchase $160 million worth of security tokens, the firms announced on Friday.
While the tokens — which run on the Ethereum blockchain as ERC-20 tokens –do not constitute company equity and confer no voting rights, they do entitle investors to dividends. Specifically, 10 percent of the tZero’s adjusted gross revenue will be distributed to token holders on a quarterly basis.
Those dividends will come from tZero’s regulated trading platform, which will list (ICO) tokens and other blockchain-based securities.
As CCN , tZero recently entered into a joint venture with BOX Digital Markets — a subsidiary of the Boston Stock Exchange — to develop the platform, which backers say will be the world’s first regulated security token exchange.
Commenting on the news, CEO and tZero Executive Chairman Patrick Byrne said:
“Years ago we saw the world-shaking potential of blockchain, and since then we have been methodical in building tZERO into a company that will bring great efficiency and transparency to capital markets domestically and abroad. I truly believe what we are doing is historic and, while there is still much to be done, our success in this STO [security token offering] has given us the resources we need to see it through.”
Notably, GSR appears to have purchased the tokens at the same rate offered to other investors. Often, VCs making bets this large are able to leverage their capital and influence to score deep discounts from ICO operators.
Excluding GSR’s investment, the company says that it has received $168 million worth of token sale commitments, of which it has physically received $95 million.
GSR’s investment brings that total to $328 million, far above the $250 million that tZero had said it intended to raise when it first filed to inform the Securities and Exchange Commission (SEC) of the offering. Nevertheless, the firm said that it will be extending its ICO until early August.
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Set to Launch on March 22nd, In Time for the IRS Reporting Deadline
[Note: This is a press release]
New York, NY – March 22, 2017 – , one of the world’s largest blockchain infrastructure hosting services, has built a game-changing software product that allows every single American to properly report their digital currency gains to the taxman. Node40 Balance, available for Dash users today and bitcoin users later this year, is setting a completely new standard in precision and simplicity because it calculates net gains and losses for every single transaction made throughout the calendar year, and rolls it all into the IRS approved Form 8949 with attachable worksheets for the user; an industry breakthrough given the First In First Out (FIFO) method currently used by competitors often causes gross misreporting. Node40 Balance, two years in the making, has been under comprehensive beta testing using real-world use cases. The product has been anticipated by high frequency Dash traders, miners, accountants, lawyers and tax professionals.
Node40 CEO Perry Woodin explains:
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Discussing the need for a product like Node40 Balance, Woodin says:
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Woodin goes on to state:
As a company that accepts digital currency as payment for service, we do not want to over or under pay our tax liability, nor let our customers do so either. In business and in life, every penny counts. If you aren’t accurately calculating your gains, losses, and income, you could end up leaving money on the table. We want this to become an indispensable tool for every digital currency user across America.
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