Overstock takes steps toward issuing blockchain-secured stocks by purchasing a 25% stake in trading firm Pro Securities.
Following their March application to the U.S. Securities and Exchange Commission (SEC) to issue US$500 million worth of blockchain-secured crypto stocks, Overstock has started securing the plan for the opening of their Medici stock market.
By acquiring a stake in a trading firm, which is rumored to be valued at US$250,000, Overstock has lined up the “alternative trading system” needed to actually allow interested investors to purchase crypto stocks. Pro Securities is already registered with the SEC in this capacity, reducing the amount of legal and regulatory work Overstock will need to complete in order to allow individuals to purchase the equities.
With the SEC's decision pending on Overstock's public sale of these new forms of stocks, the involvement of Pro Securities also opens up the option that the giant electronics retailer could switch to issuing private securities. This would possibly be more difficult for the company, as they would be both the issuer and seller of the shares. More importantly, though, it may also sell short the ultimate vision Overstock has for their crypto asset plans.
The private share route is gaining traction in the digital currency world. It’s how Bitcoin Tracker One (XBT) has been able to sell regulated exchange notes for institutional investors interested in Bitcoin's USD price volatility. Overstock's planned blockchain-backed shared ledger, however, is designed to sidestep the need for a stock exchange at all.
Speaking to Protocol.tv in February about the possibilities of their crypto equity, Overstock's CEO, Patrick Byrne, didn't just limit his vision to his own company. Instead, he described how he sees the advent of crypto stocks as an important democratization of the investment landscape.
“It's not so much important for Overstock to do it, but it's important to the world that it be done.”
Byrne has often made his hatred of Wall Street, and America's established financial investment system, well known. By 2007, he had evolved into being called “the most hated man on Wall Street”, a badge Byrne wears with honor for his efforts to expose criminality in the financial system. Describing the details of his plan further in the interview, Byrne explains:
“Crypto equity is the use of the blockchain to create a parallel universe, that parallels the financial system as we know it; Wall Street as we know it.”
Once the platform has been established for Overstock to sell its crypto equity, Byrne aims to open the system to other companies wanting to sell shares. Until the SEC grants permission for the company's release of the US$500 million in crypto shares, however, Overstock shares will continue to only be available through their Nasdaq ticker OSTK.