The U.S. Securities and Exchange Commission (SEC) has given its first approval to a public benefit organization. Blockstack Public Benefit Corp has been given the green light for its public token offering under Regulation A+.
Following the approval, Blockstack will sell Stacks tokens (STX) with the goal of raising $28 million during the open offering. At the previous offering in 2017, Blockstack could only sell solely to accredited investors. This new offering round is open to the public, however.
Streamlining The Process
Reg A+ is a fast track for smaller companies to publicly raise money. It does so with less rigorous accounting and disclosure requirements when compared to a traditional initial public offering (IPO). Blockstack has gone through a strenuous process since the SEC devised a new framework for token offerings under Reg A+, something the regulator had never done before.
With this maiden SEC-approved token offering, Blockstack CEO Muneeb Ali believes they eliminated an important bottleneck for blockchain projects.
“It is a truly groundbreaking day for decentralized technology and, by extension, fundamental digital rights. By building technology that “can’t be evil” by design; trusting centralized organizations to make the right choice is replaced by mathematical proofs.”
Blockstack Sets the Precedent
According to the offering document, 62 million of Blockstack’s tokens will sell at $0.3. From there, 78,333,333 Stacks Tokens will be offered at a discounted price of $0.12 (capped at $3,000 per participant). Furthermore, as part of the offering, an additional 40 million tokens will go toward the company’s ‘App Mining Program.’ Here, developers receive rewards for building top-ranked applications within the Blockstack ecosystem.
In the past year, the SEC has been rather stringent towards unregistered initial coin offerings (ICOs). A recent example was a dispute with messaging app Kik over its $100 million ICO. Moreover, several US-based cryptocurrency exchanges have started de-listing tokens that might fall under violations of US security regulations.
Now that Blockstack has successfully led the way for blockchain projects to raise capital, more companies may begin to collaborate with the SEC for their token offerings.
What do you think of this latest SEC approval? Will this attract more blockchain projects to the US or will they continue to prefer other jurisdictions? Let us know in the comments!