Decentralized computing network Blockstack has applied to the United States Securities and Exchanges Commission (SEC) to launch a $50 million token sale which — if approved — would be the industry’s first SEC-qualified offering. The development was revealed in a filing with the SEC dated April 11.
The sale, which is being proposed under the SEC Regulation A+ framework, would be operated via a wholly-owned subsidiary, “Blockstack Token LLC,” and involve the sale of 295 million Stacks tokens.
The filing outlines that different allocations of a total of 295 million tokens would be sold at between $0.12 to $0.30 apiece, according to specific terms, as well as via Blockstack’s so-dubbed App Mining program. This latter involves the conferral of tokens in exchange for the development of applications that run on Blockstack’s decentralized application (DApp) network.
If approved, the sale would notably see Harvard’s endowment fund, among others, directly involved in the purchase. The filing reads:“The token advisory board consists of seven members. Three [...] are designees of affiliates of the Harvard Management Company, Lux Capital and Foundation Capital, respectively, limited partners of the QP Fund which have purchased an aggregate of 95,833,333 Stacks Tokens.”
Introduced in 2012 under the Jumpstart Our Business (JOBS) Act, the SEC’s Regulation A+ exemption offers small enterprises an alternative to a traditional initial public offering. It authorizes companies to offer and sell securities to the (American) general public, rather than solely to accredited investors. Under the exemption, companies can raise up to $50 million (Tier 2) — or up to $20 million under Tier 1 — over a 12-month period.
In an official blog post from Blockstack CEO Muneeb Ali published today, he stated that upon approval, the offering could “set a precedent for others in the industry.” He added:“Recently, U.S. markets have been closed to crypto projects given regulatory uncertainty, and we believe in opening the U.S. markets to innovation in this area. We’ve been working with securities lawyers to create a legal framework that can enable blockchain protocols to comply with SEC regulations.”
As reported, staff at the SEC have just recently published a framework to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security.
To date, a host of crypto industry figures and lawmakers have repeatedly called on the agency to provide greater regulatory clarity for the interaction of blockchain tokens and securities laws.
By Marie Huillet