How Patrick Byrne Levered a SPAC to Create Cryptocurrency Kingdom

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(Republished with permission from Prospectus LLC) -Patrick Byrne has often been dismissed by contemporaries for being brash, confrontational and someone who just likes to create chaos. Courtesy of a $1million stake in Kennedy Cabot Acquisition Holdings, a Special Purpose Acquisition Company aka SPAC, Byrne is further along on a journey to secure the title of being the cheapest online discount broker and also, the crown to the cryptocurrency kingdom .

Overstock.com, the on-line retailer led by multi-industry disruptor Patrick Byrne has seen its share price surge nearly 100% in the past four weeks, and not because of online shopping spikes during this holiday season. And not because it was the first retailer to accept bitcoins back in the day when no other retailer even understood the concept of distributed ledger and blockchain, the elements that power bitcoin, the ubiquitous cryptocurrency whose price has gone from $500 to over $20,000 in less time than it takes most companies to float an initial public offering.

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Patrick Byrne

Along the way, we can guess that the former online discount retailer of stuff has watched his net worth increase by at least several hundred million dollars, as the shares of all of his various holdings have increased multi-fold. Its because Patrick Byrne has been hard at work during the past number of months executing a stealth strategy by leveraging his purchase of a SPAC (special purpose acquisition company) that has made Overstock a virtual holding company whose portfolio of companies now includes (i) Medicia Ventures, a cross between a PE and VC platform that is focused on cryptocurrency enterprises (ii) an on-line brokerage that was formerly a woman-owned broker-dealer known as Muriel Siebert & Co and renamed “tZero” that will enable day traders to make $2.99 stock trades and pay in cryptocurrency, (ii) a stake in Delaware Board of Trade, an electronic exchange run by the former head honcho at the Philadelphia Stock Exchange former vice-Chairman of NASDAQ OMX and positioned as the first and only blockchain based Alternative Trading System fully licensed by the SEC, which will float Initial Coin Offerings (ICOs)  and enable investors to buy and sell bitcoin based bond funds that are packaged in similar fashion to exchange-traded funds aka ETFs.

Having a successful ICO is usually easier and costs less than an IPO, the penalties for fraud remain the same. Make sure you document everything and have an experienced partner in your corner to ensure you are meeting obligations to both investors and, eventually, regulators.

But every road has its bumps. A planned initial coin offering (ICO) for Overstock blockchain subsidiary tZERO, scheduled to go live at midnight Monday, has yet to launch as originally anticipated. While little is known about the now nearly day-long delay, a countdown clock on SAFTLaunch.com, the issuance portal for tZERO’s token, has expired without any update to the company’s website or social media accounts. Indeed, CoinDesk’s calls to key Overstock executives, including CEO Patrick Byrne, went unreturned or unanswered today.

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SEC Cyber Unit Brings First ICO Fraud Charge

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ICO Fraud Charge is the First, Certainly Not Last as Initial Coin Offerings No Longer Under Regulators’ Radar

(Courtesy of RTTNews) – The Securities and Exchange Commission said Monday that its new cyber unit has obtained an emergency asset freeze to halt an Initial Coin Offering or ICO fraud.

The SEC noted that the ICO fraud, advanced by “PlexCorps” owned by a mysterious shell company known as DL Innov Inc., which is operated by Canadian resident Dominic Lacroix and Sabrinia Paradis-Royer raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month.

These charges are the first to be filed by SEC’s cyber unit, which was created in September 2017.

The SEC’s complaint was filed in federal court in Brooklyn, New York. The complaint alleges that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the Internet to investors in the U.S. and elsewhere by claiming that investments in PlexCoin would yield a 1,354 percent profit in less than 29 days.

Based on its filing, the SEC obtained an emergency court order to freeze the assets of PlexCorps, Lacroix, and Paradis-Royer. These charges are the first to be filed by SEC’s cyber unit.

The complaint seeks permanent injunctions, disgorgement plus interest and penalties. In addition, the SEC is seeking an officer-and-director bar for Lacroix, and a bar from offering digital securities against Lacroix as well as Paradis-Royer.

Issuers of Initial Coin Offerings: Don’t Get Caught Short By Failing to Follow the Spirit of Securities Regulations. Industry experts at Prospectus.com can provide sage guidance for staying inside the regulatory goal posts and prepare investor offering documents that conform with the spirit of the regulatory regimes governing ICO initiatives.

The SEC’s cyber unit was created in September to focus on misconduct involving distributed ledger technology and initial coin offerings, the spread of false information through electronic and social media, and hacking as well as threats to trading platforms.

“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing. We acted quickly to protect retail investors from this initial coin offering’s false promises,” said Robert Cohen, Chief of the Cyber Unit.

In August, the SEC’s Office of Investor Education and Advocacy issued an Investor Alert warning investors about scams of companies claiming to be engaging in initial coin offerings.

BrokerDealer.com expresses thanks to RTT News for the coverage content. For the full article from RTTNews.com, please click here

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