tZERO fined $800k for sharing order information without SEC knowledge

Rick Steves

“Whether and how an ATS displays orders and trading interest is fundamental to any ATS’s operations because order display provides buyers and sellers with the expectation of liquidity in the ATS and the potential execution of a participant’s orders”

tZERO has allegedly violated federal disclosure rules, according to the Securities and Exchange Commission, who fined the blockchain-powered trading platform $800,000.

The subsidiary of Overstock.com was able to settle with the US financial watchdog under the condition of refraining from further regulatory violations.

The SEC pressed charges against tZERO because it has allegedly failed to properly disclose key information in accordance with federal regulations.

The trading platform was sharing order information with a broker-dealer affiliate and Blue Ocean Technologies, a Singapore-based trading partner which it later acquired. tZERO also failed to file an amendment to its Form ATS with the SEC for more than two years.

“These proceedings arise out of Respondent’s operation of an alternative trading system (“ATS”), pursuant to an exemption from registration that required it to comply with Regulation ATS, promulgated under the Exchange Act.2 Regulation ATS requires, among other things, that ATSs make certain disclosures to the Commission”, said the SEC’s order.

“In addition, Regulation ATS requires an ATS that has a significant percentage of overall trading volume in a security or category of securities during a certain period of time to comply with a number of heightened requirements, known as the “Fair Access Rule”.

“Whether and how an ATS displays orders and trading interest is fundamental to any ATS’s operations because order display provides buyers and sellers with the expectation of liquidity in the ATS and the potential execution of a participant’s orders,” the SEC order added.

FinanceFeeds webinar: Expert panel to discuss market data for multi-asset brokerages  

tZERO launched major updates to crypto app

A few months ago, tZERO added five new altcoins to its trading platform: Bitcoin Cash (BCH), Stellar Lumen (XLM), Cardano (ADA), Compound (COMP), and Uniswap (UNI).

This brings its total available cryptocurrency suite to 15 different coins and coincides with recent updates to the tZERO crypto app.

The additional cryptocurrencies will complement tZERO’s existing product range of digital assets, which includes the already installed Bitcoin, Ethereum, Litecoin, Chainlink, Dogecoin, USDC, 0x, Bitcoin SV, Basic Attention Token, and Ravencoin.

The move comes on the heels of tZERO launching major updates to its crypto app, which introduced faster settlement times and higher buy limits: The app now supports $25,000 per day deposit limits as part of its standard offering.

tZERO Crypto has also partnered with a third-party custodian to custody investors’ assets in a regulated hosted wallet environment.

tZERO’s broker-dealer subsidiary, tZERO Markets, offers crypto sales, trading, electronic execution, and portfolio execution for buy- and sell-side clients.

The company’s retail brokerage service, which is also registered with the Securities and Exchange Commission (SEC), allows the firm to grab the capacity to serve individual traders instead of only accredited investors. Additionally, it provides token issuers with investment banking and placement agent services in connection with capital raising activities.

 

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<