tZero, a blockchain-focused firm, has obtained approval from the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to operate as a Special Purpose Broker-Dealer for digital asset securities custody. This significant development positions tZero as one of the privileged few in the U.S. with this regulated broker-dealer license, enabling them to offer secure and compliant custody services for digital asset securities.
In the realm of digital asset custody, U.S. regulations mandate that firms secure specific licenses, such as the Special Purpose Broker-Dealer designation, to effectively hold and manage digital securities while adhering to stringent SEC and FINRA guidelines. Previously, Prometheum Inc. was the pioneer in this domain, having obtained its broker-dealer license in January of this year and setting a benchmark for industry compliance.
Following Prometheum's success, tZero now joins the ranks as the second firm to receive approval from the SEC and FINRA, signifying a new era of regulatory clarity for digital assets in the U.S. This milestone achievement signals a positive shift where issuers can fully leverage blockchain infrastructure without compromising on regulatory compliance, thanks to trusted partners like tZero.
New License Enables Expanded Offerings
With this new license, tZero gains the capability to provide a diverse range of products and services for issuers and investors. These offerings include automated trading, auctions, and block trades for various assets like real estate and securitized art. tZero's portfolio goes beyond custody services, as they boast an SEC-approved transfer agent unit that facilitates the management of blockchain-based securities issuance and transfer.
Moreover, tZero's trading environment on the tZERO Securities ATS promises liquidity for investors post-regulatory holding periods, eliminating the need for third-party custodians. This streamlined approach aims to enhance accessibility and efficiency in the digital asset market ecosystem.
A Glimpse into a New Era of U.S. Regulation
Alan Konevsky, tZero's executive vice president and chief legal officer, views the company's approval as a herald of a new era in regulatory innovation within the U.S. financial landscape. Expressing confidence in tZero's pioneering efforts, Konevsky underlines the company's commitment to expanding blockchain adoption in traditional financial markets.
