t0.com, a blockchain tech startup majority owned by Overstock.com, today revealed it successfully completed another beta test of its t0 software. In the software test, t0 successfully used the Bitcoin blockchain to record evidence of compliance with US SEC regulation on securities short selling, known as Regulation SHO.
Patrick M. Byrne, CEO of t0.com commented:
The blockchain is the most important financial development of our lifetimes. While others theorize about the innovations this new technology can usher in, t0 is taking action and proving the concept daily, including using it to crack open the notoriously inaccessible black box of securities lending. This is further evidence of the world-historical potential of distributed, cryptographically secured ledgers.
According to Byrne, when fully operational, each Pre-borrow Assured Token will provide the purchaser a valid locate satisfying the SEC’s Regulation SHO requirements. These tokens will be auctioned nightly in a Dutch auction using t0 software and the transaction will be recorded on the blockchain.
Earlier this week, hedge fund Clique Fund took part in the testing to purchase locates for all 30 Dow Jones Industrial Average stocks.
Our introduction of the Pre-borrow Assured Token will solve a problem for the beneficial owners, by bringing their inventory into a transparent market; it will solve a problem for the short seller, who will be able to borrow in a transparent market; and it will solve a problem for regulators, who for several years have taken a more aggressive stance regarding this mischief than they did a decade ago, I feel obliged to acknowledge. Unfortunately, a few bad apples spoil the barrel. That barrel needs a good scrubbing, and that’s what our Pre-borrow Assured Token will do.
t0.com is an assumed name for Medici, Inc., which is a majority-owned financial technology subsidiary of Overstock.com.