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GSR Investment in tZERO Slashed from $400 million to $100 million

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GSR Investment in tZERO Slashed from $400 million to $100 million

GSR reduced investment

Overstock and their subsidiary, tZERO, broke the news today, that their long pending deal with GSR Capital has been downsized.

Some readers may recognize the name, GSR Capital, as they are also the ones that turned to tZERO for the tokenization of cobalt. Beyond this, the duo made waves over the past few months, as GSR was expected to make a $404 million investment in tZERO.

Unfortunately, this deal never materialized. While the announcement was made in mid-2018, the deal was supposed to occur in the fall. This was then delayed, as a third party was to come on-board. Fast-forward to today, and the deal has now been downsized, with an expected completion date of April 2019.

This downsizing will see the $404 million slashed down to $100 million. To ensure the eventual completion of the deal, each of the involved parties have signed a memorandum of understanding, outlining the deal.

New Entrant

GSR Capital will not solely provide the $100 million investment. The third party involved has now been identified as Makara Capital.

Makara Capital is an investment firm with pre-existing close ties to GSR Capital.

Why Go Through The Trouble?

Beyond the obvious appeal of the funds involved, there is more to this deal than simple financial allures. Each of these investment companies has sturdy footing within Asian markets. As tZERO continues its global expansion plans, strategic partnerships such as the one described here today will be key.

Commentary

Patrick M. Byrne, earlier today, issued a statement through an Overstock press release. The following is what he had to say.

“The previously-announced GSR equity investment in Overstock and tZERO has not been completed. However, we remain in discussions with GSR Capital and Makara Capital, a key partner of GSR Capital, regarding a potential transaction. Both have recently signed an MOU with tZERO outlining a transaction in which Makara and GSR would co-lead an investment of up to $100 million in tZERO common stock and close the transaction in April subject to due diligence, negotiation of binding contracts and regulatory approval. The investors would also assist with tZERO’s expansion in Asia and other regions of the world and link them with other key partners from their portfolios.

Following the recent successful launch of tZERO’s new security token trading technology, we are excited by the emerging partnerships and business opportunities in front of us. More information on Overstock’s retail and blockchain properties will be shared within our upcoming 2018 FY Earnings reporting. I urge you to join us for that discussion of our business at a time and date to be announced soon.”

For those that may be surprised by the statement above: don’t be. When the first delay occurred in this investment, Patrick Byrne issued warnings to ‘not count your chickens before they hatch’.

At the time, he stated,

“Despite our concerns (which no doubt you share), we have decided to grant GSR the time requested to onboard this additional partner (who we think will in fact be a highly valuable participant in the ecosystem). Additionally, in a display of commitment to our partnership, GSR has signed a retainer agreement with tZERO to ensure the cobalt offering is not delayed by this extension on the GSR investment. While we are appreciative of GSR’s commitment and excited about the opportunity in cobalt offering, we do acknowledge to you our shareholders that one should not assume the arrival of GSR’s investment until it arrives.”

GSR

GSR Capital founder, Sonny Wu, created the company in 2004. Operations are currently based out of Hong Kong, China.

To date, GSR has shown great interest in the blockchain industry at large. Despite this hiccup, it is expected that they will remain active in blockchain investments.

MAKARA Capital

As an independent company, Makara Capital was formed in 2008. Since then, this investment firm has gone on to see great success, with various global hubs.

Company headquarters are situated in Singapore, where Makara Capital is regulated by the Monetary Authority of Singapore.

tZERO

A young company, tZERO is the brainchild of Patrick Byrne – founder of overstock.com. tZERO has caught the attention of many in the burgeoning digital securities sector. They have done so, to date, through impressive execution of their roadmap. The most recent large milestone was the launch of their digital securities trading platform.

In Other News

To learn more about the companies and deals discussed here today, check out a few of the articles below.

GSR Capital turns to tZERO for the tokenization of Cobalt

tZERO Completes Distribution of Security Token

Patrick Byrne to Increase Focus on tZERO and Digital Securities Exchanges

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Security Token News

Smartland Acquisition Opens New Doors for Crowdfunding

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Smartland Acquisition Opens New Doors for Crowdfunding

Acquisition

For companies working on a global scale, the shortest path to their goals is often through acquisitions of already established entities. An example of this was made recently when Smartlands announced that they had acquired a majority share of Shojin Financial Services.

By completing this move, Smartland now inherits the abilities of SFS – such as their investment licence. This licence was awarded to SFS by the Financial Conduct Authority in 2017. By receiving this licence, SFS is able to legally function as a global crowdfunding platform. The process of receiving this licence is a lengthy and difficult one – a process bypassed by Smartland through the acquisition.

With this move, there is not much left holding Smartland back from taking the sector by storm. The company even recently announced the listing of their platform utility token on industry leading crypto exchange, Bittrex. Everything is turning up Smartland.

STO

Beyond news of this acquisition, Smartland also indicated that the first security token offering to be hosted on their platform has now gone live. This event will see the distribution of digital securities backed by UK based real estate. No doubt, the choice to base the first platform STO upon a real-estate backed asset is due to extensive experience in property investment by SFS.

The sale has a funding target of £1 million, with 30% equity to be distributed among qualified investors.

Commentary

In their announcement, multiple representatives from Smartlands took the time to elaborate on these developments.

Arnoldas Nauseda, CEO of Smartlands, stated,

“The fact that SFS possesses the type of license necessary for the Smartlands business model to flourish is not the only reason for the acquisition…We are proud to share SFS’s values ​​and vision for the development of financial markets around the world. The firm also has a substantial pool of classic investors that the SFS team has been developing since 2017. Now, thanks to the Smartlands proprietary technology, these private investors have the opportunity to invest in the digital ownership of real assets secured on one of the most powerful and fast blockchains in the world ‒ Stellar network.”

Viktor Krekotin, Strategy Adviser of Smartlands, stated,

“The partnership with SFS is the last brick in the construction of the Smartlands Platform…This makes Smartlands one of the first fully regulated platforms for the issuance of security tokens. And Stellar will do what it does best: lightning fast, secure transactions at negligible costs to all involved, which makes Stellar the best blockchain for all operations with security tokens.”

Smartlands

Smartlands is a London based company that was founded in 2017. Above all, Smartlands functions as a tokenization platform, catering to a global client base.

Operations at Smartland are overseen by CEO, Arnoldas Nauseda.

Shojin Financial Services

Shojin is a UK based company that was founded in 2009. Above all, Shojin acts as an investment firm specializing in real-estate.

Company operations are overseen by cofounders Jatin Ondhia and Sandeep Puri.

In Other News

An emerging trend, as of late, is the increasing adoption being seen of the Stellar blockchain within the digital securities sector. Due to the structuring of this blockchain, it is proving to be highly adept at meeting the needs of the industry. Check out the article below for another example of a company recently adopting Stellar.

VMC – Connecting the Dots of Urban Mobility

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Security Token News

AmaZix turns to KABN for Identification Services

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AmaZix turns to KABN for Identification Services

Onboarding Identification

In their experience dealing with security token offerings, KABN has noted the need for next-gen identification services. Through the creation, issuance, and management of digital securities, they are able to ensure that tokens remain compliant with regulations. The initial onboarding process, which ensures only appropriate investors gain access to these STOs, is lacking in sophistication.

This recognition led AmaZix to seek out KABN for their patent-pending identification services dubbed ‘KABN ID’. This pairing of companies announced their strategic partnership today.

While KABN ID is what drew AmaZix to their new partner, they have indicated that they intend to make use of the full suite of KABN services. This includes opening new avenues for market access through KABN’s ability to facilitate crypto-fiat transfers.

Commentary

In their announcement, the CEOs of both KABN and AmaZix took the time to elaborate on this partnership.

Ben Kessler, CEO of KABN, stated,

“The overwhelming evidence justifies the need for closer scrutiny of processes and regulatory frameworks in token offerings, with the securitization of digital assets believed by many to be the natural progression for the space. It is a direction that AmaZix believes in and is working diligently towards, as demonstrated by their specialized advisory services and their partnership track record. We share their excitement and optimism for the industry’s future and look forward to collaborating.”

Jonas Karlberg, CEO of AmaZix, stated,

“Programmable regulatory compliance is a built-in feature with digital securities, ensuring the necessary KYC and AML processes are satisfied. But if STOs are to be the way forward, we have to analyze and consider the practical aspects of identity management on the blockchain, particularly with the growing debate surrounding privacy and the protection of personal data in the era of GDPR…And this is where we believe KABN’s solutions for token offering verification are technically appropriate for securing accreditation and will allow for responsible and compliant KYC processes. In addition, its neo financial services like its branded Visa prepaid card and banking wallet will give users an additional aspect that bridges the world of traditional and alternative finance, allowing them to use and spend crypto with more ease.”

AmaZix

AmaZix is a Hong Kong based company that was established in 2017. Above all, AmaZix functions as a consultation firm, focusing on the burgeoning digital securities sector. In their short time within the industry, they have been wildly successful – helping to raise over $1.3 billion for over 100 companies.

KABN

KABN is a Vancouver based company that was founded in 2017. Under the guidance of CEO, Ben Kessler, KABN has gone on to develop a suite of services aimed towards the digital securities sector. These range from their flagship identification service, to a crypto based debit card, and loyalty program.

In Other News

Both KABN and AmaZix have been busy establishing themselves in this nascent industry. Throughout their steps towards establishing themselves, we have detailed them various times here at securities.io. Check out the articles below to learn a little bit more about what these two companies have accomplished as of late.

Top STO Marketing Agencies to Watch in 2019

With an Eye on Digital Securities, AmaZix and Chainstarter have partnered

Digital Securities Consortium formed Between Industry Participants

KABN plans for Security Token Offering Hosted by Tokenise

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Tokeny and Archax form Strategic Partnership

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Tokeny and Archax form Strategic Partnership

Teaming up

Archax is ironing out all the details prior to the upcoming launch of their digital securities exchange. Part of this process is establishing partnerships with issuance platforms. In doing so, Archax will ensure that their own platform will have no shortage of token listings.

With this in mind, today, the duo of Tokeny and Archax announced a strategic partnership. This relationship will see digital securities issued via the Tokeny platform, through the use of their TREX framework, listed for trading on the Archax exchange.

This development creates a comprehensive suite of services for investors, and will help the industry deliver the much sought after liquidity within these assets.

Commentary

In their press release, the CEOs of both Tokeny and Archax, took the time to comment on the partnership discussed here today.

Graham Rodford, CEO of Archax, stated,

“We are building a regulated, institutional market – based in London – for institutions to trade in credible, digital securities globally.  As such we want to partner with leading firms like Tokeny, who are a key part of this emerging ecosystem, and tokenising assets that can then be listed and traded on our exchange.  The tokenisation of real-world assets using blockchain technology will not only unlock liquidity and create secondary markets for assets that are currently hard to trade, but also has the potential to disrupt all traditional financial markets too.

Luc Falempin, CEO of Tokeny, stated,

“We know how strong Archaxs team is and they share the same belief that blockchain will transform capital markets. For blockchain to become the preferred infrastructure for this industry its imperative for there to be seamless transferability between the key actors in the market. By agreeing this partnership, we are able to offer the end-to-end compliant issuance of their security and Archax will provide the customer with the all-important access to the secondary market.

Tokeny

Tokeny was founded in 2017, and is headquartered out of Luxembourg. Above all, Tokeny functions as a FinTech company. Over the past year, the team has set their sights on developing a comprehensive platform, tailored towards the digital securities sector. Under the watch of CEO, Luc Falempin, Tokeny has managed to establish various strategic partnerships, along with the release of the ‘TREX’ framework.

Archax

Graham Rodford founded Archax in 2018, and currently acts as the CEO of this young company. Archax maintains headquarters in London, England. Here, the company is actively developing a next-gen exchange for digital securities – which is anticipated to launch in the latter half of 2019.

In Other News

Both Tokeny and Archax have found themselves in our news feed various times over the past year. Whether establishing strategic partnerships, or announcing future STOs on their platforms, this pair of companies has been active. Below are a few articles detailing past developments of each.

Archax Gears up for Launch with Quod Financial

Archax – A Bridge to the Digital Economy

VR Bank to Issue Security Token with the help of Tokeny and Lition

Tokeny releases TREX – The First Public Framework for Security Token Offerings

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