Overstock.com is being investigated by the Securities and Exchange Commission regarding its activity in the cryptocurrency field.
A company subsidiary, tZero, is hoping to raise $250 million through a token sale. But in an 8K filing Thursday morning, the online retailer said the SEC’s enforcement division requested “certain documents related to the offering and the tokens” in February.
Overstock said it is cooperating with the investigation.
It’s part of a larger cryptocurrency probe by the SEC that’s looking into whether there have been violations of securities laws as Bitcoin and other cryptocurrencies have traded in a largely unregulated environment. The Wall Street Journal said multiple companies have been put on notice in the past several months, but did not name them.
Overstock, in the filing, downplayed the risk of the SEC inquiry.
“While the SEC is trying to determine whether there have been any violations of the federal securities laws, the investigation does not mean that the SEC has concluded that anyone has violated the law,” the company said. “Also, the investigation does not mean that the SEC has a negative opinion of any person, entity, or security.”
Still, news of the investigation spooked investors. Overstock shares were down as much as 10% in pre-market trading, before regaining a bit of ground. As of 9:15am ET, they were off more than 6%.