In the US today, the SEC cleared Blockstack to hold what will be the first regulated utility token sale in America. This paves the way for a new system of fundraising for start up businesses in the burgeoning cryptocurrency industry.
Previous crypto token sales and ICOs (initial coin offerings) barred US citizens from participating legally. Now, American retail investors (and companies, too) can invest in these regulated forms of initial coin offerings.
BlockStack, founded in 2013 by Muneeb Ali and Ryan Shea, centers around building a decentralized internet, also known as Web3. Essentially, Blockstack is a new kind of app development platform that is built on a blockchain. As an example of the features BlockStack offers, developers can create applications that ensure data privacy, something that is becoming lost within the legacy internet, as we’ve seen in the fight against end to end encryption as well as with Facebook’s data woes.
The approval is offered under Regulation A+, which enables young startups to raise capital outside of the traditional IPO pathway. With an approval amount of $28 million, Blockstack will become the first company in the US to move forward with a Reg A+ token sale.
And speaking of tokens sales, it starts Thursday according to the WSJ.
Token Sale Details
The minimum amount to participate is $100. When signing up, individual investors need to preregister with their name, address, phone number, email and social security number. Further verification that meets AML/KYC standards will also be required. Tokens are starting out at $.30 each as long as the sale doesn’t get ‘over subscribed’.
Blockstack’s historic token sale will be available to all Americans UNLESS they live in the following states:
- North Dakota
Exact requirements for investors for the token sale are available on the StacksToken website, a summary of which is below:
Because it is a utility token and not a security token, it will not represent ownership shares in Blockstack. Instead, participants are buying utility tokens that have multiple uses within the Blockstack Network.
As always, do your due diligence in researching the team and project and assessing your risk tolerance before participating in a token sale.
All in all this is great news. Especially since after the 2017 ICO explosion, funding largely dried up for these fledgling startups, crippling US blockchain innovation.
Blockstack’s token sale represents the first ever digital utility token offering under Reg A+.
According to the WSJ, Co-Founder Ali joked that the $2 million spent during the 11- month approval process was their “donation to the crypto industry.”