The sale is part of a proof of concept from the Utah-based e-tailer showcasing how financial instruments can be digitized and traded on cryptographic distributed ledgers such as the Bitcoin blockchain. Overstock first began accepting Bitcoin in January 2014 and has since been one of the ecosystems most active public advocates.
The cryptobond sold to FNY will pay 7% interest over a five-year period. As an added security precaution, Overstock will issue a USD 5 million loan to the firm with a 3% annual interest.
Overstock also hinted at the complex regulatory process it expected to encounter when first launching its attempt to build a decentralized stock exchange last year, suggesting the US Securities and Exchange Commission (SEC) has not approved the offering.
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