According to CoinDesk, tZero Group Inc., backed by Overstock and Intercontinental Exchange (ICE), has joined Prometheum Inc. as one of the two U.S. special purpose crypto broker dealers. The newly licensed firm announced plans to launch products under its new status early next year.
Achieving full registration as a U.S. broker dealer under a rule that allows crypto firms to join these ranks, tZero follows the path previously taken by Prometheum Inc. This special purpose broker dealer registration under the U.S. Securities and Exchange Commission (SEC) oversight permits the firm to take custody of customers' digital asset securities. However, this ability intersects with the industry's ongoing legal battle with the SEC over the classification of most crypto tokens as securities. To take custody of crypto securities, tZero and Prometheum must treat tokens as securities, a label that many issuers in the industry are contesting.
David Goone, CEO of tZero, stated that the special purpose broker-dealer status will enable the company to offer safe, secure, and regulated broker-dealer digital asset custody and other innovative products for issuers, investors, and market participants. The company plans to start opening services for assets including private securities, securitized real estate, art, and sports assets as early as next year. The initial focus will be on the full digitization of tZero's Series-A preferred equity security, TZROP.
Previously, tZero had registered a trading platform known as an alternative trading system (ATS). The new license will allow the firm to provide custody, clearance, and settlement services under one umbrella. The SEC did not immediately respond to a request for comment on tZero's new status. As of press time, the Financial Industry Regulatory Authority had not updated its BrokerCheck service to acknowledge tZero's approval, leaving the specific distinctions between Prometheum and tZero in their licensing unclear. Earlier filings confirmed that tZero can conduct private placements of securities and facilitate digital asset security trading on its ATS.