Home News SEC fined tZERO platform $800K

SEC fined tZERO platform $800K


The U.S. Securities and Exchange Commission (SEC) has fined the tZERO blockchain-based asset exchange $800,000 for violating federal rules regarding alternative trading systems.

According to the order dated January 10, the company did not properly disclose information about the use of trading data outside the United States. We are talking about the Singapore company Blue Ocean Financial Technology. In 2017, the retail industry giant Overstock acquired the company, which includes tZERO.

Thus, the platform offered the SEC to resolve the conflict without acknowledging or refuting the agency’s conclusions. In addition to the fine, it is ordered to refrain from violations in the future.

This is not the first claim against tZERO

Furthermore, this is not the first claim from the American regulator against tZERO. In March 2018, the Commission was interested in the platform’s tokensale. Moreover, two years later it expanded the investigation.

Then Overstock received a request to provide “documents related to the investments of GSR Capital, as well as an alternative trading system tZERO”. As part of another process, the regulator decided to check “the policy of insider transactions, as well as some labor and consulting agreements.”

In 2019, investors accused Overstock and its former CEO Patrick Byrne of securities fraud. After Byrne left the company, a number of investors left tZERO.

Groundless accusations of market manipulation

In May 2020, Overstock appealed a lawsuit related to the airdrop of security tokens. Representatives of the company called groundless accusations of market manipulation and the dissemination of false information.

Recall that previously, the Commodity Futures Trading Commission (CFTC) fined Polymarket $1.4 million; for servicing over-the-counter binary options trading without proper registration.

Polymarket is a decentralized platform that allows users to use binary options contracts to wager on the results of event markets such as pro-sports contests and political elections. The CFTC stated that event market contracts backed by a pair of binary options “constitute swaps” within its authority. Also, the CFTC and the Commodity Exchange Act (CEA) must regulate platforms providing market exposure.

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