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Overstock CEO resigns amid ‘deep state’ diatribe, still insists on blockchain revolution

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The chief executive at blockchain-advocating internet retailer Overstock has announced his resignation from the company, 10 days after issuing a press release which made reference to the ‘deep state’.

Patrick M. Byrne, who founded the company in 1999, said in a statement that “while I believe that I did what was necessary for the good of the [US], for the good of the firm, I am in the sad position of having to sever ties with Overstock, both as CEO and board member.”

The statement from August 12 confirmed the veracity of two stories from investigative journalist Sara Carter. Carter had previously noted details of a romantic relationship between Byrne and Maria Butina, a Russian national who is currently serving time in a US jail for conspiracy to act as an unregistered agent of a foreign state. This came amid wider allegations around purported Russian interference in the 2016 US presidential elections – and Byrne’s role within that.

In an interview with CNN on the day of his resignation, Byrne claimed the FBI had directed him to pursue such a relationship with Butina, a claim former FBI director James Comey later dismissed as ‘ridiculous.’

Byrne’s previous statement references the deep state – inferring a conspiracy theory around collusion within the US government – alongside calling the FBI the Men in Black, adding this was the third time the bureau had benefited from his assistance. “I will speak no more on the subject,” he wrote at the time. “Instead, having lived in places lacking Rule of Law and having witnessed the consequences of its absence, I plan on sitting back and watching the United States Department of Justice re-establish [emphasis his] Rule of Law in our country.”

As Overstock’s share price sunk by 38% following these remarks, this may have been something of an optimistic take which culminated in the precipitous end of a sorry saga. Yet in his valedictory statement yesterday, Byrne’s vision for blockchain technologies remained undimmed, saying the blockchain revolution “will reshape key social institutions.”

Overstock’s blockchain history – and future

Overstock fell in love with blockchain from an early age and has remained faithful ever since. The company claimed it was the first major retailer to accept Bitcoin after a partnership with Coinbase. As far back as 2014, Byrne was keynoting Bitcoin conferences and sharing how the company was using blockchain ‘to prevent institutional mischief around the globe by providing trust through technology’, as the company itself puts it.

This is by no means limited to the in-store experience. Medici Ventures, whose major investments include Symbiont and Voatz, is a wholly owned subsidiary of Overstock. The venture firm said on Twitter following Byrne’s resignation: “Patrick’s vision for Medici Ventures as a leader in blockchain technology is what has brought the company’s world-changing initiatives to fruition. We will continue to build on his legacy developing a tech stack for society and bringing blockchain-based products into production.”

In a letter to shareholders dated July 15, Byrne wrote at length about Medici’s portfolio, referring to it as a keiretsu, a Japanese term for a group of companies with interlocking business relationships. tZERO, a company which advocates blockchain for capital markets, was heavily cited, as was fintech provider Bitt and Medici Land Governance. A look at Medici’s companies page sees the aforementioned three head and shoulders above the rest of the portfolio.

The latter’s vision will be familiar to regular readers of The Block, with Marc Taverner, global ambassador at Bitfury, having previously discussed the benefits blockchain technologies could bring to land registry.

Byrne wrote last month that these three companies are ones ‘in which the word ‘trillions’ shows up in discussions’ – and it was a theme he continued in his resignation letter. “In [land governance, central banking and capital markets], our blockchain progeny are arguably the leading blockchain disruptors in existence,” wrote Byrne.

Going forward, all sides will hope for it to be business as usual. “Patrick Byrne has been an advocate for tZERO since our inception and we are sorry to see him step down from his roles at Overstock and affiliated companies,” tZERO said in a statement. “Patrick’s departure will have no impact on tZERO’s operations as we continue to focus on our planned roadmap.”

“It has been an honour to serve you through thick and thin, threats grand and arcane, for the past 20 years,” Byrne added. “You own some disruptive assets herein… you own blockchain assets that seem to revolutionise capital markets, finance, and governance for the poor. It has been 20 years of remarkable innovation from a team that is now honed for it.”

Interested in hearing more in person? Find out more at the Blockchain Expo World Series, Global, Europe and North America.

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