Retailer Overstock Being Investigated For Possible Federal Law Violations

The e-commerce company Overstock has made it known that the American regulators are looking into the $250M tZero ICO for probable violations of federal securities laws.

It has now gotten a growing portfolio of the blockchain startups over the years past.

The filing detailed that the SEC’s enforcement division contacted Overstock to enquire about willingly handing documents over connected to the structure of the tZero initial coin offering.

The company said that it is at present in the process of answering to this request and intends to work with the agency during the investigation.

From the filing:

“While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation does not mean that the SEC has concluded that anyone has violated the law. Also, the investigation does not mean that the SEC has a negative opinion of any person, entity, or security.”

A Wall Street Journal report showed that the SEC had served subpoenas a lot of ICO operators.

This is a probe targeted at regulating the promising ICO fundraising industry, which regulators claim has been used to bypass federal regulations.

The report also stated that the SEC is watching simple agreements for futures tokens with a close eyes, as it believes these token sale contribution agreements have been used to unlawfully circumvent laws leading securities trading.

Overstock has conducted the tZero ICO under a simple agreement for future equity—(SAFE) — the investment tool from where the SAFT was originated — trying to raise $250M.

The company has said that tokens will have features of both a utility and a security, as investors can use them to receive discounts or hold them to receive a part of tZero’s profits.