Decentralized blockchain startup, Blockstack, announced in a press release today that it has filed an offering statement with the U.S SEC to raise a $50 million capital through a token sale, which supposedly will leverage the SEC’s Regulation A+ exemption.
Under U.S laws, the SEC’s Regulation A+ exemption which was introduced in 2012 allows approved firms to conduct equity crowdfunding by issuing two-tier securities to investors in the US. Such offerings will exist for 12 months and could target either $20 million or $50 million capital.
It is this opportunity that Blockstack hopes to use through its subsidiary, Blockstack Token LLC. Upon approval, Blockstack would issue 295 million Blockstack Stacks (STX) token at $0.30, a distribution that is more flexible than an initial public offering (IPO).
Blockstack, which aims to build a decentralized internet infrastructure, plans to use the revenue from the token sale to improve its ecosystem.
Speaking in the announcement Blockstack CEO, Muneeb Ali, revealed that his firm has been working with the securities lawyers to “establish a legal framework,” which will support blockchain protocols to correspond with SEC’s regulations.
Mr. Muneeb further stated that the development could “set a precedent for others” within the industry since it aligns with the guidelines recently published by the SEC’s Fintech Division.
Hopefully, it will not help only public offerings but serve “as a path to launch new public blockchains and establish a path to bootstrapping decentralized ecosystems,” Muneeb added.
The matter of when tokens issued by projects should count as “security” has been a thorn in the flesh for the U.S crypto ecosystem with many even arguing that the situation stunts the growth of the industry.
As Coinfomania has reported recently, an effort to combat that regulatory uncertainty is also underway. Earlier this week, U.S lawmakers reintroduced the Digital Taxonomy Act, hoping to legally liberate ICO tokens from the SEC’s definition of “securities.”