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GSR Capital to Invest in tZERO at $1.5 Billion Valuation

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  • Up to $270 million in tZERO equity (at $1.5 billion post-money valuation)
  • $30 million purchase of tZERO Security Tokens from Overstock.com
  • Up to $104.55 million in shares of parent company Overstock.com common stock

SALT LAKE CITY, Aug. 09, 2018 (GLOBE NEWSWIRE) — Overstock.com, Inc. (NASDAQ:OSTK) and t0.com, Inc. (“tZERO”), announce that the companies have both signed term sheets with GSR Capital, a Hong Kong based private equity firm, to invest up to $374.55 million in exchange for common equity in blockchain subsidiary tZERO and common equity in Overstock.com. Overstock and GSR Capital have also entered into a purchase agreement pursuant to which GSR Capital will purchase $30 million in tZERO Security Tokens from Overstock.

As part of the term sheet agreement, GSR Capital will purchase up to 3.1 million shares of OSTK common stock at a five percent discount to the closing share price on August 1, 2018. GSR Capital will also invest up to $270 million for up to 18% of tZERO’s equity at a valuation of $1.5 billion (post-money). Additionally, pursuant to a purchase agreement, GSR Capital will purchase from Overstock $30 million in tZERO Security Tokens. These tZERO Security Tokens were purchased by Overstock during the recently-closed tZERO Security Token Offering in a non-cash transaction in which Overstock forgave $30 million in tZERO intra-company debt. GSR’s Security Token purchase agreement replaces the GSR letter of intent previously announced on June 29, 2018.

The equity transactions are subject to definitive documentation and other customary closing conditions. They also provide GSR Capital with certain rights to allocate a portion of the investments to third-party designees.

“We are honored to have GSR Capital as a strategic investor,” said tZERO CEO Saum Noursalehi. “The tokenization of securities has the potential to disrupt global capital markets responsible for moving hundreds of trillions of dollars. Together with our partners, we will globalize our blockchain-based platform, bringing more efficiency, liquidity, and trust to capital markets.”

“GSR Capital has the prescience to understand the disruptive power of blockchain capital markets,” said Patrick M. Byrne, founder and Chairman of tZERO, and founder and CEO of parent company Overstock.com. “They are aligned with our vision for the future of capital markets built upon the speed, trust, and security of the blockchain. And most importantly, they think big, and want to help us scale this vision globally as quickly as possible.”

“GSR Capital is very excited to partner with tZERO in its effort to expand the global footprint for blockchain-enabled asset trading including stocks, bonds, commodities, etc. We have a long-term view on how we want to scale this platform on a global basis,” said GSR Capital’s Chairman and founder, Sonny Wu.

About Overstock.com

Overstock.com, IncCommon Shares (NASDAQ:OSTK) / Series A Preferred (Medici Ventures’ tZERO platform: OSTKP) / Series B Preferred (OTCQX:OSTBP) is an online retailer based in Salt Lake City, Utah that sells a broad range of products at low prices, including furnituredécorrugsbedding, and home improvement. In addition to home goods, Overstock.com offers a variety of products including jewelry, electronics, apparel, and more, as well as a marketplace providing customers access to hundreds of thousands of products from third-party sellers. Additional stores include Pet Adoptions and Worldstock.com dedicated to selling artisan-crafted products from around the world. Forbes ranked Overstock in its list of the Top 100 Most Trustworthy Companies in 2014. Overstock regularly posts information about the company and other related matters under Investor Relations on its website, http://www.overstock.com.

About tZERO

t0.com, Inc. (“tZERO”) is a majority owned subsidiary of Overstock.com, focusing on the development and commercialization of financial technology (FinTech) based on cryptographically-secured, decentralized ledgers – more commonly known as blockchain technologies. Since its inception, tZERO has pioneered the effort to bring greater efficiency and transparency to capital markets through the integration of blockchain technology.

About GSR Capital

GSR was founded in 2004 by Sonny Wu and Richard Lim. Today, “GSR Ventures”, “GSR United Capital” and “GSR Capital” are three independent yet complementary teams set up by the partners in 2016 with the aim of sector leadership and going global with unique investment strategies and resources. GSR Capital has offices in Beijing, Hong Kong and the USA.

O, Overstock.com, O.com, Club O, Main Street Revolution, and Worldstock are registered trademarks of Overstock.com, Inc. O.biz and Space Shift are also trademarks of Overstock.com, Inc. Other service marks, trademarks and trade names which may be referred to herein are the property of their respective owners.

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in the Company’s Form 10-Q for the quarter ended March 31, 2018, which was filed with the SEC on May 8, 2018, and any subsequent filings with the SEC.

Media Contact:

pr@overstock.com

Investor Contact:

ir@overstock.com

SOURCE: Overstock.com, Inc.

Source: Overstock.com, Inc.

Referenced Stocks: OSTBPOSTK

Security Token News

TokenSoft Extends Reach with ‘Global Markets’

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Broker / Dealer Acquisition

TokenSoft has announced the acquisition of a stake within an SEC registered broker / dealer.  As a result, this move will see ‘Marpine Securities’, rebranded as ‘TokenSoft Global Markets’.

Although the initial stake only equates to 20%, the option remains for TokenSoft to acquire the full 100% of Global Markets.  If desired, further acquisition is, however, contingent on the approval from industry regulators.

TokenSoft customers will have access to a variety of new services with the completion of this move. For instance, one such service will be for digital security issuers to now have hosting options. They can both manage and host an STO themselves, or through Global Markets. Beyond this, TokenSoft now gains the ability to refer custody solutions, exchanges, and more.

This move follows a trend being seen in the sector, as various companies are pushing to become true end-to-end solutions. TokenSoft is now one step ahead of most of their competition.

TokenSoft

Based out of San Francisco, California, TokenSoft finds itself as a leader within the digital security sector. Catering to customers like Andra Capital, Hedara HashGraph, and more, TokenSoft specializes in blockchain solutions. They provide customers with the platform and services needed to issue and manage digital securities.

TokenSoft CEO, Mason Borda, commented on the acquisition of Marpine Securities LLC. He stated, “As a result of rapidly growing interest in the security token market, we have been inundated with requests for broker-dealer support services that we historically have not been able to provide…We heard our clients, and now we’re answering. With this investment, we are building a one-stop-shop for digital asset issuance and management – enabling us to expand our security and compliance support to every stage of a digital asset’s lifecycle.”

TokenSoft Global Markets (Formerly Marpine Securities LLC)

With this acquisition, Marpine Securities LLC will now become known as TokenSoft Global Markets. Despite this move, The ‘Global Markets’ division of TokenSoft will continue to act independently from the ‘mother company’. The pair, however, will function with a shared vision, and seamless integration with one another.

TokenSoft’s Lawson Baker, Head of Project Zero, commented on the merger. He stated, “The new services offered by TokenSoft Global Markets will be fully integrated into our high touch customer experience…We are committed to providing our clients with everything they need to participate in the future of security tokens, and TokenSoft Global Markets is a reflection of that commitment.”

Competition

Those looking to take market share away from TokenSoft are numerous. For example, recent months have seen the rapid development of various companies looking to provide token issuers with end-to-end STO services. Recently we have covered multiple of these endeavours, as shown below.

Above all, with these moves being made, look for TokenSoft to continue their presence at the forefront of the digital security sector.

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Security Token News

OpenFinance Network launches first U.S. Security Token Trading Platform

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From Beta to Live

In a long awaited announcement, OpenFinance Network has indicated that their platform has gone live.  In doing so, OFN becomes the first platform to facilitate the trading of digital securities within the United States.

Until this point, the project had been in beta – meaning it was a nearly finished product, being offered to only select users for the purpose of hashing out any remaining ‘bugs’.

By going live, OFN essentially heralds a new age of liquidity, efficiency and opportunity for investors.  Secondary markets, representing a massive investor base, now allow for greater exposure of tokens distributed via STOs.  It is this ability to openly trade that equates to high levels of liquidity.

This platform is what many competitors are marching towards.  OpenFinance Network is the first one to achieve the goal.

Those that are interested in taking part in STOs, but are not accredited investors, should take solace.  Use of the platform is open to both accredited, and non-accredited investors.  This applies to both United States residents, as well as those outside of the nation’s borders.

OpenFinance Network

Founded in 2017, OpenFinance Network is based out of Chicago, Illinois.  Since launch, OFN has established themselves as an industry leader.  Their specialties lay in their established framework for security token services.

Speaking on the live launch of OFN was company CEO, Juan HernandezHe stated, “2018 is said to be the year of security tokens, but, for us, this is only the beginning…We are committed to supporting all levels of investors in participating in this burgeoning alternative asset ecosystem. As we continue to partner with more security token assets, we are able to offer people more opportunities for wealth generation.”

With their sights set on industry advancement, the sector should look very different during 2019.  Already boasting a plethora of tokens for investors to trade, expect for OFN to continue this growth.

One of the more notable tokens to be traded on the platform is that of Blockchain Capital (BCAP).  This was one of the industry’s first STOs to ever have been completed.  This is just one example of some of the projects that can be found on OFN.

Read more on BCAP here.

Commentary

Various industry leaders have commented on the progress made by OpenFinance Network.  Here is what a few of them had to say:

CEO of Securitize, Carlos Domingo, says, “Security tokens, or digital securities, will only begin to make a meaningful contribution to the financial landscape when compliant trading can take place on a wide scale. We are proud to have partnered with OpenFinance Network to make this a reality.”

Co-Founder of Blockchain Capital, Brad Stephens, says “As creators of the world’s first security token, the BCAP, we are encouraged by the growth of the security token market and related infrastructure. We are excited to be partnering with OpenFinance Network that is enabling liquidity of security tokens in a regulatorily compliant way.”

 

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Security Token News

BANKEX to Open Security Token Trading Platform

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BANKEX Platform

In addition to developing an STO/DSO framework, BANKEX has now announced the launch of a digital securities trading platform.

While multiple frameworks for the issuance and distribution process are in the works, few announcements have been made with regards to trading platforms.

 The main benefits being offered by digital securities typically hinge around liquidity and efficiency.  To achieve these sought after traits, retail investors must have access to secondary markets which host said tokens.

The planned trading platform by BANKEX will make these benefits a reality.  With plans to facilitate trading for both utility and security tokens, the platform stands to appeal to a diverse crowd.

While various security token protocols are on the market, the BANKEX platform will initially support the following:

Each of these token standards are products of the Ethereum blockchain.  They vary from the typical ERC-20 token by incorporating various features. These include, but are not limited to, facilitating KYC checks, adhering to AML, and more.

As of Oct. 30th, the exchange has launched with basic features. For now, trading is limited to BTC, LTC, ETH, BKX, and BCH.  In time, expansion of supported coins will see the inclusion of security tokens.

Custody

Straight from the SEC, it has been said that a major hurdle within the blockchain industry is that of custody solutions.  While various companies have indicated theirintent to create such services, very few have actually done so at this point in time.

Along with the launch of their trading platform, BANKEX also intends to offer custody services as well. This means that investors will be able to entrust their tokens to beheld by BANKEX in a safe manner.  A safe manner implies practices such as insurance acquisition, cold storage, etc.

End-To-End

Instead of focusing on a subset of the digital securities industry, BANKEX intends to be a comprehensive platform.  While this makes the hurdle towards widespread launch higher, it also raises their ceiling for potential as a platform. 

If BANKEX is successful in what they want to achieve, investors will have no need to utilize outside services, thereby increasing the influence of BANKEX within the sector.

BANKEX

Founded in 2015, BANKEX is based out of New York, New York.  They are a financial service company with self-described mission to… “Add liquidity to assets that have an underrated value due to the way that classic financial markets currently operate.”

Beyond the news of their intended platform launch, BANKEX recently made news as they were the recipient a Maltese VFA Licence.  This opens the door to various financial services, which are detailed in a recent BANKEX blog post, HERE.

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