Blockstack Formally Files $50M Token Offering With SEC

Since 2018, it has been a difficult period for initial coin offerings (ICOs). The average amount of capital raised for each ICO has plummeted as the cryptocurrency communities grow more wary of the crowdfunding method. However, Blockstack has just announced a potentially massive, SEC-approved ICO. If approved, the offering would be like a diamond in the rough based on the regulatory clarity it would bring alone. Blockstack is aiming to create a decentralized computer network with the help of scientists from Princeton University. It would be privacy-centric, with users being able to store their data on this distributed network rather than have it be housed with a tech giant. Currently, Blockstack already boasts some 80 applications including Graphite, a decentralized alternative to Google Docs, and other open-source blogging apps. The company previously raised a separate $50M during its venture investment rounds which fell under SEC Regulation D. Now, however, Blockstack is looking to move beyond venture capital funding given its success. In an attempt to ‘open up the market,’ it has been in conversations with securities lawyers to create a token offering which will be SEC-approved. If it goes through, it would potentially be the largest SEC-approved ICO ever. It is likely that Blockstack’s token offering will be counted as a security. As it stands now, the SEC has been woefully unclear about its requirements for token issuers and cryptocurrency crowdfunding. Although ICOs are still effectively banned, the SEC has recently been open about the possibility of security token offerings (STOs) being a solution. They would be like ICOs but registered, regulated, and would effectively be considered legal securities. It’s clear that this is at the forefront of SEC’s concerns given that it released a new framework outlining regulations on token securities just last week. Do you think Blockstack will prove to be crucial in opening up new possibilities between regulators and token issuers? Let us know your thoughts in the comments below.