Jor JT Law: Security Token Exchange tZERO

Welcome to Digital Security Frontier Vision: The Voice of the Core Builders from Global Digital Security Industry # 15.

Today, It’s a great honor to have Jor JT Law from tZERO to do this interview!

JT is the co-founder of, the dominant accredited investor verification service in the world. is a subsidiary of tZERO, a leader in blockchain innovation for capital markets.

T’s experience includes investment and advisory transactions in technology, education, media, and manufacturing companies that culminated in IPO and sale exits in the US, China, and Hong Kong. JT served on the Investment Committee of GF Investments (private equity fund affiliated with GF Securities). Previously, JT worked in the investment banking departments of Credit Suisse, Morgan Stanley, and Citigroup in New York, Hong Kong, and London, and completed transactions in equity and debt capital raising, mergers, and acquisitions.

(Important Disclaimer: Opinions expressed are solely his own and do not express the views or opinions of the companies listed.)

Q: What is VerifyInvestor’s principal business? How did VerifyInvestor get to know tZero?

A: VerifyInvestor is the dominant provider of accredited investor verification services in the world. Sales of private securities to accredited investors enjoy exemptions from certain regulatory filings with the SEC (Securities and Exchange Commission). In fact, in 2017, there were 37,785 Regulation D offerings that raised more than US$1.8 trillion, with foreign issuers accounting for about 22% of the amount raised.[1]

VerifyInvestor first interacted with tZero through working with tZero on their US$134mn security token offering.

Q: Through the process of being acquired by tZero, what value do you think tZero saw in your company?

A: Through working with tZero’s own security token offering, I believe tZero saw how efficiently VerifyInvestor processed accredited investor verifications, then a bottleneck for the industry that was lacking solutions for processing large issuances involving large numbers of investors (individual, institutional, international) requiring verification on a reliable, timely and cost attractive basis. VerifyInvestor also worked closely with many of the leading deal/project platforms in the industry.

Q: From the time you worked with tZERO, what has been tZERO’s progress?

A: tZero launched its ATS and allowed trading in its security token (TZROP) in mid-January and is likely the most actively traded security token. tZERO has announced it expects to launch the industry’s first regulated security token exchange in the US by year-end 2019. As tZERO is a subsidiary of a publicly listed company, one should refer to its public announcements, made at least on a quarterly basis, for more information.

Q: As a tokenized securities trading platform,what are tZero’s strengths?

A: tZERO has a strong end-to-end solution including technology tools/platform, ATS and associated broker-dealer licenses and network, and upcoming first regulated security token exchange. tZERO is fortunate to have the resources to allow it to investing heavily in its infrastructure, products, and services.

Q: tZERO has been attracting attention since its inception. For the STO industry, what impact does the launch of the tZERO platform have on this industry?

A: tZERO is an industry pioneer and draws attention to the tokenized securities industry. The high level of publicity draws investors, issuers, and partners to the tZero platform.

Q: At present, there are more and more organizations involved in the tokenized securities industry, and extended to Europe, Australia, Taiwan, and other regions. Except for the United States, where do you think the next very explosive region is? why?

A: I see heightened interest and activity in countries and markets where there is regulation change for tokenized securities. Close to home in the Asia region, in late 2018, Hong Kong and Singapore received a lot of attention with their regulatory sandboxes for “virtual assets” (Hong Kong) or “FinTech” (Singapore). More recently, Taiwan is in the spotlight. For a good idea of where the interest and activity are, just look at where the conferences are being held!

Q: How do you view China’s digital securities market? What kind of role does China have to play in the digital securities industry?

A: China has large potential for digital securities, given its large economy and large size of assets that could be tokenized. However, China will first require regulatory authorities’ approval and regulation for tokenized securities. Hong Kong is already taking the first step through the SFC’s virtual assets sandbox announced in October 2018. As Hong Kong was the top IPO market in 2018 (also 2015 and 2016), it will be very interesting to see what happens in the Hong Kong market.

Q: What is the trajectory of the tokenized securities industry? What are the developments and changes in the financing of the financial industry? How do you make this projection?

A: There has been tremendous interest and significant investment into almost all parts of the tokenized securities value chain: security token exchanges, ATS, broker-dealers, tokenization technology, funding platform, registry management, custody, and more. Currently, issuance has been low and in small amounts, secondary trading has been low, but to be fair, many issuances are locked up. The tokenized securities industry could see a breakthrough if some of the high profile issuers and high-quality projects contemplated complete successful transactions.

I see tokenized securities as a new financing technique that is in competition with existing technologies we are familiar with, such as equity IPOs and private securities sales. For tokenized securities to succeed, they must be competitive to the existing methods, i.e. raising capital at a lower cost of capital, raising more capital than previously possible, achieving better liquidity, etc. If not, investors and issuers will stay with the existing financial products and channels they are already accustomed to.

Q: Given that Tzero plays a very important role in the tokenized securities industry, how do you think about solving the problem of insufficient liquidity in STO transactions?

A: Insufficient or unclear liquidity is a global problem for the tokenized securitized industry, whichever market or player can solve this problem will be the market winner. I think this problem is solved with high quality issuances that investors want to invest in. The industry also needs investors of larger scale, i.e. institutional investors, to increase industry size.

[1] Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009‐2017 by Scott Bauguess, Rachita Gullapalli, and Vladimir Ivanov, Division of Economic and Risk Analysis (DERA), U.S. Securities and Exchange Commission, August 2018.

  • Check Chinese version of this interview here



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