Customers will have until March 6 to withdraw their assets from the platform.
Overstock-owned trading platform tZero will sunset its tZero Cryptocurrency app, which combines a digital wallet with exchange services, on March 6, the company tweeted Friday morning.
The app’s discontinuation comes as the company struggles to build its business while regulatory authorities “clarify the regulatory environment surrounding crypto,” reports by tZero’s tweets. It likewise comes approximately one year after the Securities and Exchange Commission (SEC) ordered the company to pay $800,000 for violating federal disclosure regulations. Users will have to withdraw their assets from the application before tZero Crypto’s shutdown on March 6. Until then, the platform’s custodian will continue to custody customers’ crypto.
TZero Cryptocurrency was launched in 2019 with the idea of creating the 1st platform where customers could trade digital currencies, blockchain-based securities and traditional stocks with a single app, pending regulatory approval. On the other hand, those aspirations were complicated by the firm’s run-ins with regulatory authorities and other controversies.
In January of a year ago, the company paid $800,000 to settle an SEC order that alleged the company neglected to properly disclose that it had shared order information with both a broker-dealer affiliate and Blue Ocean Technologies, a trading partner in Singapore it acquired at a thereafter date. Regulatory authorities likewise announced a cease-and-desist order as part of the settlement.
Before the settlement, the company had already had its fair share of complications owing to scandals within its parent company’s executive suite. In August 2019, Overstock CEO Patrick Byrne stepped down from his position as head of the company over states that he had become entangled with a Russian spy.
In his resignation letter, Byrnes wrote that he did not want his ties with the Russians to overshadow the company’s ventures, especially its foray into blockchain-based technology and the cryptocurrency space.
The most recent decision to shutter the tZero Cryptocurrency application may not signal the end of tZero’s ambitions to offer digital investment securities to its clients, however.
“Our regulated affiliates will be playing a key part in bringing compliant digital investment securities to the market including cryptocurrency assets that can be lawfully offered on a regulated securities platform,” tZero tweeted.
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