The Boston Securities and Token Exchange (BSTX), which is partially owned by Overstock’s tZero, is requesting a rule change from the Securities and Exchange Commission (SEC) to launch a security tokens trading platform. All ownership records on BSTX would be stored on the Ethereum blockchain, and the exchange would operate during regular market hours between 9:30 am and 4 pm Eastern Time, like tZero.
Unlike tZero which offers tokens that are exempt from SEC security regulations, BSTX will trade tokens that are full-fledged public securities.
Three different smart contracts on the Ethereum blockchain will be used to track ownership, whitelisted addresses, and compliance with regulations. Whitelisted addresses show who is conducting trades and whether they are allowed to, and is equivalent to participant IDs assigned by the Financial Industry Regulatory Authority (FINRA) on typical exchanges.
Typically it takes months for the SEC to approve, delay, or deny any cryptocurrency-related decision, and it remains to be seen if BSTX will be approved. If it is approved it would be one of the only venues with the ability to offer cryptocurrency securities in the United States.
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