Zero became a FINRA-approved broker-dealer for digital securities
The United States has a second special purpose broker-dealer (SPBD) for digital asset securities. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have approved tZero Digital Asset Securities as a digital asset SPBD, giving it the right to hold digital asset securities on behalf of retail and institutional clients.
The new status allows SEC-regulated alternative trading system operator tZero to manage, clear and settle securities without a third-party custodian. In the description. The firm helps private companies go public through securities offerings.
tZero wants to set an example
tZero “has a long-term position to allow many digital assets in the market to become securities under existing legal frameworks,” he said. Although that claim is widely disputed in the crypto world, tZero considers digital assets as collateral when protecting them. Alan Konevsky, head of legal and corporate affairs at tZERO, said:
“On behalf of the digital asset industry as a whole, we will use this unique opportunity to demonstrate how regulatory transparency can lead to real-world innovation, novel products and real trade-offs between traditional financial and real-world assets.”
The new service will be available in early 2025. It will be the first product to fully digitize tZERO's Series-A preferred equity security (TZROP).
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Putting compliance before the law
In May 2023, SPBD raised eyebrows in the crypto world when it became the first recipient of digital securities. Like tZero, Prometheum was a small player in the digital asset market. The designation of the SPBD has set off chants of protest and accusations of bias.
Source: Alan Konevsky
Prometheum considered Ether (ETH) as a security and later added Uniswap (UNI) and Arbitrum (ARB) to its list of “securities”. The SEC launched an investigation into Ethereum to determine whether it considered it a security, but dropped the investigation in June.
tZero began its existence as a cryptocurrency and securities exchange from Overstock.com. In the year It closed its cryptocurrency arm in February 2023.
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