- Overstock shares took a nose dive Thursday morning after a filing showed regulators asked for information about the company’s cryptocurrency operations.
- The Securities and Exchange Commission has issued a wave of subpoenas to companies in the crypto space.
Shares of online retailer Overstock dived Thursday morning after a regulatory filing showed the Securities and Exchange Commission asked for information about a recent fundraise by tZero, Overstock’s cryptocurrency exchange subsidiary.
tZero has raised $100 million for its initial coin offering, Overstock CEO Patrick Bryne told Business Insider. The fundraise, which is capped at $250 million, will go towards building out the firm’s blockchain-powered alternative trading system.
Overstock is best known for its online marketplace for discount furniture, but it has been expanding its foothold in the crypto world via a number of ventures including tZero and Medici Partners, a venture capital arm. The regulatory filing out Thursday shows the SEC asked the retailer for information about tZero’s initial coin offering. From the filing:
“In February 2018, the Division of Enforcement of the SEC informed the Company that it is conducting an investigation in the matter Re: Overstock.com, Inc. (NY-9777) and requested that the Company voluntarily provide certain documents related to the Offering and the Tokens in connection with its investigation.”
Overstock was trading down more than 8% at $55.60 a share at the beginning of Thursday’s trading. It was down more than 10% during pre-market trading.
The news comes after The Wall Street Journal reported Wednesday the regulator had issued a wave of subpoenas to people and companies connected to initial coin offerings, a mechanism a number of companies in the cryptocurrency space have used to raise funds.
Nathaniel Popper at the New York Times followed the story with more details, writing: “The demands for information began last year, and companies have continued receiving them in recent months.”