Overstock’s security token platform, tZERO, has lost a major investor following the departure of CEO Patrick Byrne last week.
Another Blow for tZERO
During interim CEO Jonathan Johnson’s very first investor call in his new role, he confirmed that Makara Capital “will be not investing in tZERO right now.” However, he did mention that Makara would continue to monitor the development of tZERO and possibly reconsider in the future. The news is another blow for Overstock’s security token platform, as in August 2018, Overstock announced that Makara would invest $404 million USD in tZero along with Chinese investment firm GSR Capital but this was reduced to $100 million in March.
Bizzare Turn of Events
Johnson replaced Byrne as CEO last week after the latter abruptly resigned having admitted to a three-year relationship with Maria Butina, a Russian spy currently serving an 18-month sentence in federal prison. Overstock shares have plummeted over 40% following Byrne’s resignation and release of a bizarre statement mentioning “Deep State,” “Men in Black,” and “political espionage” campaigns against Hillary Clinton and Donald Trump. Overstock shares haven’t been the only thing affected by this turn of events, as seen by Makara’s withdrawal from tZero.
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“In his twenty years as Overstock’s leader, Patrick’s vision for Overstock as an innovation leader has come to fruition. It will be my mission as I take the helm to continue and build on Overstock’s achievements and success […] I am confident Overstock’s future – both in retail and blockchain – is bright,” Johnson said in a statement.
In March, it was revealed that the Securities and Exchange Commission was investigating tZERO’s potential security token sale. This comes as a result of the commission taking a harder stance on initial coin offerings (ICOs) and disrupted Byrne’s plans to sell the e-commerce wing of Overstock and focus solely on crypto interests.
Featured image: DepositPhotos © nicholashan
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