Overstock.com Inc. has closed its Security Token Offering for its tZERO market blockchain platform early in an apparent sign of success for an alternative fundraising method to initial coin offerings.

tZERO was announced in December with Overstock seeking to raise $250 million in an ICO. The platform is aimed at integrating “cryptographically secure distributed ledgers with existing market processes to reduce settlement time and costs, increase transparency, efficiency and auditability.”

While initially starting well, Overstock was forced to cease the ICO after the U.S. Securities and Exchange Commission launched an investigation into it in March. The problem arose as Overstock was offering security-linked tokens — that is, tokens that relate to equity in tZERO that the SEC has deemed must be registered in the same way a traditional securities offering is.

Fast forward, and Overstock returned with its STO, which as the name suggests is clearly linked to ownership in the firm, is registered with the SEC and was limited to accredited investors.

How much Overstock raised from the STO from the Monday offering isn’t clear. However, it’s known to have raised about $100 million in the ICO and signed a letter of intent with investment company GSR Capital for the purchase of $160 million in tZERO Security Tokens in June.

Aleksander Dyo, president and co-founder of Token IQ Inc., told SiliconANGLE that this is a “historic day” that legitimizes tokenized securities.

“Not only does it prove that an incumbent firm can evolve itself to incorporate a different way of thinking through blockchain technology, it cements the idea that there is ample demand for a more trusted due diligence system for blockchain governance structures,” he said. “A new financial paradigm is being formed, and the support tools to launch it and loft it up are critical to the longevity of its success.”

Now, he said, the precedent will enable other companies to do the same with more confidence. “Parlay that confidence with industry-standard tools that an STO launch platform can provide such as complete legal compliance, investment round funding, cross-border offering participation as well as lightning-fast turnaround on offering delivery, and the friction to bring inventions like this to market lessens exponentially,” he said. “The financial, commercial and individual realms will soon be comprehensively bridged together through this process.”

Photo: Overstock Coliseum/Wikimedia Commons