|Patrick Byrne’s new company is still courting a massive Chinese bank in spite of denials |
Aug 7, 2015, 3:01pm EDT Updated Aug 8, 2015, 12:22am EDT
Michael del Castillo Technology & Innovation Editor, Upstart Business Journal New York Business Journal
Patrick Byrne, founder of Overstock.com and co-founder of T0, a settlement platform… more
Over the course of this week, Overstock.com unveiled what could be a revolutionary technology with the power to change the way Wall Street operates. At the same event Overstock CEO Patrick Byrne announced that the largest bank in the world was participating in the project. And then, shortly after, that bank denied any involvement.
The story begins Tuesday evening when Byrne discussed the platform for his new company, T0, at the Nasdaq Marketplace in Times Square. T0 is designed to facilitate simultaneous transactions, as well as what Byrne called during his talk at the Nasdaq Marketplace, “Pre-borrowed Assured Tokens,” to help owners of assets auction off those assets to the highest borrower, who can then use them to make interest-accruing loans.
If the service does what it is intended to do, it could potentially eat into a huge chunk of revenue of prime brokerage services such as Goldman Sachs, which Byrne mentioned. He also went on to say a handful of banks would test out the platform, naming one: Industrial and Commercial Bank of China, which as of May was listed by Relbanks as the largest bank in the world with a $296 billion market cap.
ICBC took issue with the notion that there was any formal partnership between the companies, and it didn't take long for T0 to agree.
“There’s no agreement, no partnerships, no nothing,” said Kevin McKeown, chief operating officer of the Industrial and Commercial Bank of China Financial Services, which is wholly owned by ICBC, during on a phone conversation this afternoon. “What they are rolling out isn’t something we’d use.”
The disagreeing statement originally centered around a comment made by Byrne on Tuesday in which, after asking for permission to say the company's name, he mentioned that T0 was "swapping files" with ICBC. It turns out, it wasn't a partnership as we originally reported. But, as both sides clarified today, a "relationship" between organizations that are "not affiliated."
The connection between T0 and ICBC is complicated.