By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - Overstock.com unit T0.com (tZERO) will launch an initial coin offering next month, company chairman Patrick Byrne announced on Tuesday at the Money 20/20 conference in Las Vegas.
In a statement, Byrne said tZERO's coin offering will be legally compliant with the U.S. Securities and Exchange Commission using an instrument called the Simple Agreement for Future Tokens (SAFT).
Analysts said the SAFT structure makes ICOs viable because it limits participation to accredited investors under Rule 506(c) of Regulation D of the Securities Act of 1933. As such, companies issuing SAFTs need not register with the SEC.
It was the same ICO structure used by Filecoin's offering in August and September, which raised approximately $200 million. Filecoin is a decentralized network that aims to facilitate the storage, retrieval, and transmission of data.
Byrne said the tZERO SAFT pre-sale is expected to open on Nov. 15 and run until Dec. 31.
The proceeds from the sale, he added, are expected to fund, among other things, scaling tZERO's technology development and regulatory teams and potentially acquiring or establishing a custody and clearing firm to complement the company's existing infrastructure.
The Argon Group and RenGen have been tapped as tZERO's advisers to lead and manage the company SAFT pre-sale.
Byrne said he expects this to be the first digital token pre-sale to generate significant participation from both the growing crypto-currency community and traditional global financial institutions.
tZERO believes its token will be the first to offer a percentage of its profits, distributed as a quarterly distribution paid into token holders' digital wallets.
"Three years ago I stood up in front of an audience for the opening Keynote speech at Bitcoin 2014, in Amsterdam, and told the world that the main event of bitcoin is not bitcoin, it is the blockchain, and it would change the world," said Byrne.
Blockchain is a digital ledger of transactions that has underpinned bitcoin, the original crypto-currency.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Phil Berlowitz)