tZERO Receives FINRA Approval to Offer Retail Access to Tokenized Mutual Funds

tZERO Group Inc. announced that its broker-dealer subsidiary, tZERO Securities, has received approval from the Financial Industry Regulatory Authority (FINRA) to act as a retailer of open-end investment companies, including tokenized mutual funds. This regulatory milestone enables the firm to offer a broader range of investment products to retail investors through a regulated broker-dealer interface.

The approval represents a significant expansion of tZERO's regulatory portfolio and aligns with the company's vision for a connected, multi-asset ecosystem that bridges traditional finance and Web3 technologies. According to Alan Konevsky, Chief Executive Officer of tZERO, this development supports cross-asset interoperability and efficiency through tokenized fund products. The company can now integrate these products into its retail platform, offering investors continuous subscription and redemption opportunities.

This regulatory advancement enhances tZERO's ability to support settlement infrastructure using retail money market products, similar to its existing collaboration with Lynq, where tZERO Securities serves as the broker-dealer operator of an interest-bearing settlement network for institutional clients. Mike Diedrichs, SVP and Head of Sales at tZERO, stated that the approval accelerates the company's growth strategy and broadens the range of investment products it can deliver, positioning tZERO to lead the next phase of evolution in investment infrastructure.

tZERO Securities is now open to working with prospective fund sponsors and asset managers to bring tokenized mutual fund products to its platform. The company operates through its broker-dealer subsidiaries, including tZERO Digital Asset Securities, LLC, which is registered with the SEC and a member of FINRA and SIPC. More information about tZERO Digital Asset Securities may be found on FINRA's BrokerCheck.

The approval matters because it represents a concrete step toward mainstream adoption of blockchain technology in traditional investment products. By enabling retail access to tokenized mutual funds through a regulated broker-dealer, tZERO is helping to democratize access to innovative financial products that were previously limited to institutional investors. This development could potentially increase market efficiency, provide greater transparency through blockchain technology, and offer retail investors new opportunities for portfolio diversification.

For the financial industry, this regulatory approval signals growing acceptance of tokenized assets within existing regulatory frameworks. It demonstrates how traditional financial products can be adapted to leverage blockchain technology while maintaining compliance with securities regulations. The move could encourage other financial institutions to explore similar tokenization initiatives, potentially accelerating the integration of blockchain technology across various asset classes.

Investors should note that digital asset securities involve unique risks, including those related to fraud, manipulation, theft, and loss. According to regulatory information, digital asset securities that are "investment contracts" under the Howey test but are not registered with the Securities and Exchange Commission are excluded from SIPA's definition of "securities," meaning the protections afforded to securities customers under SIPA may not apply. More details about tZERO Securities can be found on FINRA's BrokerCheck.