Capital markets News

NYSE parent invests in security token firm tZERO

security tokens digital asset trading

Yesterday, the Intercontinental Exchange (ICE), the New York Stock Exchange (NYSE) parent, announced a strategic investment in security token platform tZero. ICE’s Chief Strategy Officer David Goone becomes the startup’s CEO following the resignation of tZERO’s CEO in August last year. The terms of the deal were not disclosed by ICE became a significant minority investor.

The investment is part of tZERO’s latest funding round. Notably, tZERO is no longer described as a subsidiary of Overstock, which invested in the round alongside Medici Ventures, in which Overstock is the sole limited partner.

A tZERO subsidiary operates an SEC-regulated alternative trading system (ATS) and broker-dealer for the issuance and trading of tokenized stocks. Its own stock, TZROP, is listed on the ATS.

Last month, the SEC approved the Boston Security Token Exchange (BSTX) as a national security exchange instead of an ATS. BSTX is a joint venture between BOX Digital Markets and tZero.

Until now, there were two groups focused on security tokens. On the one hand, there’s a set of startups such as tZERO, Securitize, Figure, ADDX and Tokeny. On the other hand, several institutions have adopted blockchain and created digital assets ventures such as the SIX Digital Exchange, SGX’s involvement in Marketnode and SBI’s planned Osaka Digital Exchange. Yesterday the London Stock Exchange Group announced it acquired TORA, which enables it to support digital asset trading.

However, with its investment, ICE is crossing over into the startup arena and not the first time. It founded BAKKT, the now-listed startup which initially provided cryptocurrency derivatives and now offers a consumer-facing rewards and crypto app.

“David Goone was present at many of ICE’s milestone moments and deals over two decades, a key player on our management team as we built our world-class trading, clearing and data infrastructure and product line, and has been a steward of our problem-solving culture,” said Jeff Sprecher, Founder, Chairman and CEO of Intercontinental Exchange. 

“David’s leadership and his mastery of trading, data, and clearing technology will be a big asset as tZERO begins its next chapter leading the growth and adoption of next-generation market infrastructure.”