Online retailer Overstock.com has raised a total of $10.9 million in a stock offering on December 15. A historic $1.9 million of that was raised through the first-ever preferred funding effort in which shares were sold on a blockchain, specifically on the tØ blockchain platform.
According to Johnathan Johnson, president of Overstock subsidiary Medici (the company which helped develop the trading platform), blockchain-based stock trading allows for trades to be settled almost immediately (versus up to three days for traditional trading). Johnson told Coindesk:
“Overstock has demonstrated that shares can be issued and traded on the blockchain which ensures settling almost immediately. It gives other companies the opportunity to do the same.”
Johnson also said that while right now the platform is set up to only sell Overstock shares, it could be reconfigured to allow other companies to make stock offerings.
Overstock’s broker-dealer, Keystone Capital, put out instructions to investors on how to create an account on the tØ platform and how to add funds. Keystone Capital CEO Steven Capozza described the process for new investors on the platform as “extremely smooth and orderly.”
The blockchain-based trading platform is part of a push by Overstock CEO Patrick Byrne to increase transparency; shares sold on this platform will be easy for regulators to audit and could make trading less of an opaque process for investors. This may reduce compliance costs and could potentially make trading easier and less risky for smaller investors.