Overstock opens an exchange for legal token trading

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Announced today that the capital markets division of Overstock's blockchain-focused subsidiary Medici, is launching a first-of-its-kind alternative trading system (ATS), which will provide a platform for exchanging cryptographic tokens classified in the US as securities.

A joint venture with RenGen (a fintech firm, which will act as a market maker) and the Argon Group (an investment bank specializing in ICO raising capital), the ATS will be regulated by both the SEC and the Financial Industry Regulatory Authority (FINRA).

In short, the ATS will offer a legally approved, regulated alternative to a large stock exchange, such as the New York Stock Exchange and the Nasdaq.

Thus, the platform can be seen as an important step forward for the space of tokens. Simply put, at the moment there are no other methods approved by the regulator for US investors to trade security tokens.

In addition to creating liquidity for a new type of security, the new platform will be attractive, as it will reduce transaction costs by 80-90 percent compared to the model currently used by traditional securities exchanges.

The advantages of blockchain would also allow trading at the time of execution, compared to the current three-day time lag, which investors are currently experience at traditional exchanges.

Lower costs and faster settlement times will mean a fairer market with more liquidity and more efficient price discovery.