tZERO completed a $15 million Series B funding round in August 2022, with participation from Intercontinental Exchange and Overstock. This was the second and final tranche of the Series B.

The company has raised approximately $159 million in total lifetime funding, including a $134 million security token offering conducted in 2018. Investors include Intercontinental Exchange, Overstock.com, Medici Ventures, GoldenSand Capital, XSpring Capital, and StartEngine.

In October 2025, tZERO announced plans to pursue a public listing.

tZERO operates as a comprehensive blockchain-based capital markets infrastructure that transforms traditional securities into digital tokens and provides the full lifecycle management for these assets.

The platform starts with the Tokenization Studio, a browser-based workflow where companies select their asset type, choose from blockchains like Ethereum, Algorand, or Tezos, and embed smart contract rules for transfer restrictions, dividend distributions, and voting rights. From 2026, issuers will also be able to use tZERO's purpose-built tZERO Chain.

For primary issuances, tZERO provides hosted landing pages for Regulation D, A+, and CF offerings, complete with escrow services, payment processing, and investor accreditation through its VerifyInvestor.com service. The platform handles the entire capital raising process from marketing to closing.

As an SEC-registered transfer agent, tZERO maintains both blockchain records and official shareholder registries simultaneously, ensuring regulatory compliance while enabling digital asset benefits. The company's Special Purpose Broker-Dealer subsidiary provides digital custody services, making it one of only two firms in the US authorized to self-custody tokenized securities.

For secondary trading, tZERO operates an Alternative Trading System and introducing broker-dealer that gives investors a consumer-friendly web and mobile interface for placing orders. Settlement occurs near-instantly because the custodian and trading system share the same ledger infrastructure.

tZERO runs a vertically integrated B2B model, with multiple fee streams and subscription services across the tokenized securities lifecycle.

The company monetizes through transaction fees on secondary trading, custody fees for digital asset storage, placement fees for primary offerings, and subscription fees for its tokenization and transfer agent services. This multi-revenue approach reduces dependence on any single income source and creates multiple touchpoints with customers.

Regulatory barriers to entry apply, as tZERO holds Special Purpose Broker-Dealer authorization that only one other US firm possesses. This limits competition in custody and clearing services for tokenized securities.

Integration with ZeroHash enables customers to fund accounts with stablecoins and cryptocurrencies that automatically convert to USD, reducing operational steps and keeping tZERO compliant with securities regulations. The platform never directly handles crypto assets, maintaining compliance while expanding payment options.

The launch of tZERO Chain in 2025 introduces additional revenue lines, allowing the company to capture transaction fees, compliance module revenues, and on-chain data services. This shifts tZERO from a single trading venue to a broader market infrastructure provider with recurring blockchain-based revenue streams.

Prometheum represents tZERO's most direct competitor as the only other firm with Special Purpose Broker-Dealer status in the US. Prometheum launched its custody platform in September 2024 and received authority to offer correspondent clearing services to third-party broker-dealers.

However, Prometheum focuses primarily on B2B services for traditional broker-dealers seeking blockchain infrastructure, while maintaining limited direct investor-facing products. Their Alternative Trading System listings and brand recognition remain constrained compared to tZERO's established platform.

Securitize operates the largest tokenization platform by assets under management, combining transfer agent, broker-dealer, and ATS licenses with fund administration services. The company has tokenized over $3.3 billion in assets and administers $38 billion across 715 funds, including high-profile offerings like BlackRock's tokenized money market fund.

Securitize lacks Special Purpose Broker-Dealer status, requiring partnerships with external custodians for US secondary trading. This creates operational complexity and limits their ability to offer the seamless, integrated experience that tZERO provides through its vertically integrated infrastructure.

Major cryptocurrency platforms like Binance and Kraken are expanding into tokenized securities, leveraging their massive user bases and trading infrastructure. These platforms benefit from significant liquidity, brand recognition, and technical capabilities that dwarf smaller specialized players.

Retail-focused platforms like Robinhood and Coinbase are also entering tokenized equities, bringing their consumer-friendly interfaces and marketing reach to regulated digital assets. Their ability to cross-sell tokenized securities to existing crypto users creates a natural distribution advantage.

However, these platforms face regulatory constraints that limit their ability to offer comprehensive tokenization services. They excel at trading but lack the issuer-focused tools, transfer agent capabilities, and specialized compliance infrastructure that tZERO has built specifically for tokenized securities.

Goldman Sachs, BNY Mellon, and Citigroup are developing tokenized asset offerings, bringing substantial capital resources and institutional relationships to the market. These firms can leverage existing client bases and regulatory relationships to accelerate adoption among large issuers.

Traditional players benefit from deep institutional trust and the ability to integrate tokenized assets with existing custody, prime brokerage, and wealth management services. Their balance sheet strength also enables them to provide liquidity and market-making services that smaller platforms cannot match.

The incumbents face technology and cultural challenges in building blockchain-native infrastructure. Their legacy systems and risk-averse cultures may limit their ability to innovate quickly in the rapidly evolving tokenized securities market.

The launch of tZERO Chain creates opportunities to serve as infrastructure for other tokenization platforms and financial institutions. By owning the underlying blockchain, tZERO can capture transaction fees from all activity on the network, not just its own platform operations.

The utility token component adds another revenue stream through token economics and governance mechanisms. As more assets and applications build on tZERO Chain, the utility token could appreciate in value while generating ongoing fee revenue for the company.

Smart contract modules for compliance, dividend distribution, and corporate actions can be licensed to other platforms and traditional financial institutions seeking to add tokenization capabilities. This approach allows tZERO to act as a picks-and-shovels provider for the broader digital securities ecosystem.

tZERO's Special Purpose Broker-Dealer status enables it to provide correspondent clearing services to other broker-dealers lacking digital asset permissions. This B2B opportunity could scale as more traditional firms seek to offer tokenized securities without building their own infrastructure.

The scarcity of SPBD authorization creates barriers to entry in the custody market. With only two authorized providers in the US, tZERO can charge higher fees and pursue long-term exclusive relationships with institutional clients.

Integration of AI-driven analytics and cap table management tools introduces features beyond basic custody services. These software-as-a-service offerings can be white-labeled to private and public issuers, adding revenue streams beyond transaction-based fees.

The ZeroHash integration enables tZERO to expand beyond securities into cryptocurrency, foreign exchange, and commodities trading. This multi-asset approach can increase customer lifetime value while reducing dependence on the still-developing tokenized securities market.

Stablecoin funding capabilities appeal to crypto-native retail investors who prefer 24-hour trading and digital payment methods. This demographic is a target segment that many traditional brokers do not serve with 24-hour trading and digital payment methods.

Cross-border settlement capabilities through blockchain infrastructure allow tZERO to serve international issuers while maintaining US regulatory compliance. This geographic expansion opportunity mirrors how traditional exchanges serve global markets from centralized locations.

Regulatory changes: The tokenized securities market depends materially on existing regulatory frameworks that classify digital tokens as securities under current law. Changes in SEC interpretation or new legislation could alter compliance requirements, cost structure, or the viability of tZERO's business model, potentially rendering its specialized infrastructure obsolete or requiring costly rebuilds.

Limited liquidity: Secondary trading revenue depends on active markets for tokenized securities, yet most current offerings have low trading volume relative to traditional stocks or cryptocurrencies. Without sufficient liquidity to attract traders and justify custody fees, tZERO's platform could struggle to generate transaction-based revenue regardless of its technical capabilities.

Incumbent competition: Major financial institutions and crypto exchanges have larger capital resources, customer bases, and regulatory relationships that could overwhelm tZERO's first-mover advantages once they commit to tokenized securities. The company's specialized infrastructure may not provide sufficient differentiation versus competitors that can offer tokenization as part of broader bundled service packages.