After a long courtship, Overstock's security token platform, tZERO, has lost another potential investor.

"Makara will not be investing in tZERO right now," Interim CEO Jonathan Johnson said during the Overstock investor call on Monday. Johnson did mention that the Singapore-based fund will keep an eye on tZERO and possibly reconsider its decision in the future.

It was Johnson's first investor call since taking the helm of the e-commerce company last week. Overstock founder Patrick Byrne abruptly resigned from the company on Aug. 22 following an earlier admission of a romantic relationship with Maria Butina, the Russian spy currently serving 18 months in federal prison.

As for Makara, the fund's departure appears to be the final nail in the coffin for a much-touted investment that considerably dwindled in size over the course of 2019.

Makara entered the fray in March as the co-lead of a $100 million investment in tZERO common stock, which at the time was expected to close in April. That target date came and went with Makara's partner, GSR Capital, ultimately investing just $5 million in May.

Makara was reportedly still conducting its due diligence on tZERO at the time, with Overstock's Q1 earnings report noting it was "optimistic (but not certain)" that the Makara deal would be "consummated."

That did not come to pass.

On the bright side, tZERO's other security token marketplace – the BSTX exchange for publicly-traded stocks built in partnership with the Boston Options Exchange – is on-track for launch.

"We're working very closely with the regulators," tZERO CEO Saum Noursalehi said during the call, adding:

With the Byrne bombshell dropping late last week, Overstock's current leadership did not avoid the elephant in the room.

Byrne's departure was not related to the current financial state of the company, Johnson said on the call. The move itself was "a positive comment on the strength of the team and business," Johnson added, and Byrne "would not leave if he didn't believe the business is in the good hands."

Allison Abraham, the new head of Overstock's board of directors, said "there was no severance or additional payments" to Byrne upon his resignation. Bryne keeps his share in Medici, said Abraham, and the company will "communicate with him like with any other shareholder."

Stressing the point, Johnson added:

As for the ongoing SEC investigation into tZERO's token sale that derailed Byrne's plans to sell Overstock's retail business, no developments have been announced. As tZERO's Noursalehi told CoinDesk earlier this month, the agency requested additional information in the May-June time period of this year, asking for “emails and content like that.”

Also announced on Monday's investor call, Medici Ventures, the blockchain-focused venture arm of Overstock, plans to invest $2 million in a digital identity company.

"At this point, we're in the final stages to make a $2 million investment in a promising digital identity company, " Johnson said, without naming the company.

Johnson steps into the CEO role after serving as president of Medici Ventures. In an interview late last week, Johnson assured CoinDesk he remains "a full-on believer" in crypto and that he'll continue to champion Overstock's blockchain-related efforts.

Jonathan Johnson image via YouTube / Chamber of Digital Commerce