According to the Wall Street Journal (WSJ), the U.S. Securities and Exchange Commission (SEC) have given the green light to blockchain-startup Blockstack to initiate their Stacks (STX) utility token offering. The Blockstack sale is coming to market under Regulation A+ – an initial public offering (IPO) alternative established in 2012 for businesses to raise early funding capital – that has previously been used to issue shares by other companies, but this will be the first time that digital tokens will be distributed under the Regulation.
The Securities and Exchange Commission cleared blockchain startup Blockstack to sell bitcoin-like digital tokens, a first-of-its-kind offering that could give young cryptocurrency businesses a new fundraising template https://t.co/Jlb1tiV45C
— The Wall Street Journal (@WSJ) July 10, 2019
The regulatory-approved sale, which begins today and is scheduled to end on 9th September, is open to the general public and not just wealthy accredited investors. This is perceived to be a significant move as it paves the way for other blockchain companies who are looking to sell tokens rather than just stocks and shares to the public.
Maturing the Broader Crypto Industry
An an initial coin offering (ICO) was conducted by Blockstack in 2017 under a more stringent Regulation D process that saw interest from a range of accredited investors including the Winklevoss twins through their venture capital fund, Winklevoss Capital.
Blockstack themselves provide a decentralised computing network that offers a full-stack alternative to traditional cloud computing allowing users not just to safely surf but also to build secure and private applications. An open-source project, Blockstack aim to reinvent the internet so as to “…put users in control of their data and identity” which will “…make data breaches and trust violations an antiquated notion.”
Co-founder of Blockstack, Ryan Shea, stated a year ago that the blockchain industry was “…dominated by hype and speculation” and their was a need to re-focus the sector on providing real applications to serve real use cases.
Shea also apparently recognised that any product needs to be accessible and by working alongside the SEC, which is reported by the WSJ to have cost Blockstack around $2 million, the company have achieved a legally-compliant funding model that will allow for wider token distribution.
This may have far-reaching ramifications for the market as a whole and Blockstack’s most recent blog post anticipates this as they “…hope that this regulatory framework will democratise access to our network and other projects may potentially be able to use our legal framework as an example. We believe that this qualification not only benefits the Blockstack ecosystem but can help mature the broader crypto industry.”