tZERO Digital Asset Securities Completes First Regulatory Exam Without Exception, Strengthening Position in Tokenized Securities Market

tZERO Group, Inc. announced that its subsidiary, tZERO Digital Asset Securities, LLC, has reached a significant milestone in its role as a Special Purpose Broker-Dealer permitted to custody tokenized securities. One year after securing SPBD approval, the firm successfully completed its first regulatory exam without exception, demonstrating tZERO's commitment to compliance, transparency, and investor protection as it advances the digital asset securities market. This development matters because it represents a critical step toward legitimizing and institutionalizing blockchain-based financial instruments within regulated frameworks, potentially accelerating mainstream adoption of tokenized assets while maintaining investor safeguards.

An SPBD is an SEC-registered broker-dealer authorized to custody, clear and facilitate trading in digital asset securities. tZERO Digital Asset Securities is one of only two firms nationwide to hold this unique status. The company is also approved to offer correspondent custody and clearing services to other broker-dealers who lack this approval, providing an effective alternative to non-broker-dealer-led custody for digital asset securities. This regulatory advantage positions tZERO as a key infrastructure provider in New York's financial ecosystem, where institutional demand for digital asset services continues to grow.

Since its designation, the company has provided custody, clearing, and trading of tokenized securities through infrastructure that mirrors the safeguards of traditional capital markets while leveraging blockchain technology to increase efficiency and transparency. This unique status underscores tZERO's leadership in building trusted, regulated infrastructure for digital assets. The implications are significant for New York's financial sector, as successful regulatory compliance by specialized firms like tZERO could encourage more traditional financial institutions to explore tokenization while maintaining regulatory oversight.

"This milestone reflects the strength of our operational framework and our commitment to building trust through compliance," said Alan Konevsky, Chief Executive Officer of tZERO. "At tZERO Digital Asset Securities, we are proving every day that digital securities can be transacted and custodied with the same rigor as traditional instruments. Completing our first exam without exception is further validation that we are on the right path - delivering innovation responsibly within the regulatory framework." Konevsky noted that while the regulatory landscape is expected to continue liberalizing, tZERO maintains a leading edge in terms of experience and market presence. This advantage is available to other broker-dealers who are not currently permitted to custody tokenized securities directly and can elect to use tZERO's correspondent custody and clearing services.

"Reaching this one-year milestone is more than just proof of our operational readiness, it's the foundation for what's next," added Alex Vlastakis, President of tZERO Digital Asset Securities. "We've established the foundational infrastructure needed to scale, simplify adoption, and, most importantly, add value for issuers and investors. We are not just participating in this market - we are building the secure, compliant pathways that will define it." Since launching in September 2024, tZERO Digital Asset Securities has actively custodied and supported tokenized securities trading. This achievement underscores its role in bridging blockchain innovation with regulatory standards and advancing tZERO's strategic priorities of building trusted partnerships, expanding multi-asset capabilities, and driving transparency and institutional engagement across global markets. More information about tZERO Digital Asset Securities may be found on FINRA's BrokerCheck.