Online retail giant Overstock’s blockchain subsidiary tZERO has announced a joint venture with BOX Digital to launch a regulated security token exchange.

The companies entered into a letter of intent last week to set up an exchange to list and publicly trade security tokens for companies that issue, or convert existing stock to, security tokens. The new exchange would be equally owned by tZERO and BOX Digital.

According to the official release, the companies will seek approval from the U.S. Securities and Exchange Commission following execution of definitive documentation.

Lisa Fall, who currently serves as CEO of BOX Digital and as president of BOX Options Exchange LLC, would be the CEO of the joint venture.

“Our partnership with BOX Digital Markets is a significant milestone that will create the first SEC-regulated exchange designed to efficiently trade crypto securities,” said Saum Noursalehi, newly appointed CEO of tZERO. “Together, we will continue to work with the SEC as we develop a first-of-its-kind platform that will integrate blockchain capital markets into the current U.S. National Market System.”

tZERO plans to contribute cash and license tZERO’s blockchain technology for operation of the security token market. Last month, it unveiled the prototype of its planned security token trading software. BOX Digital will contribute expertise and personnel toward obtaining regulatory approval and operation of the security token market.