The United States Securities and Exchange Commission (SEC), gives a thumbs-up to Blockstack, a blockchain-based startup, in order to conduct a $28,000,000 public token offering under Regulation A+. According to a report published by The Wall Street Journal on June 10,
According to reports, the startup will launch its token online in July 11. The startup will reportedly launch its token online on July 11.
A Regulation A+, an initial public offering (IPO), is an alternative that targets startups looking for early funding. It was launched in 2012 under the “Jumpstart Our Business Startups Act.” According to the report, anyone can participate in Regulation A+ funding rounds.
Regulation A+ has two tiers, each with hard caps of raised funds exceeding $50 million in a 12-month period. This gives Regulation A+ a more lenient disclosure obligation than an IPO. According to the report, this is a moment of precedent for cryptocurrency ecosystem.
Initial coin offerings (ICOs), have been in decline for some time. Several Crypto companies raised billions of dollars through ICOs before the SEC began its ongoing crackdown citing investor protection laws. According to TokenData research, ICO funding fell from $6.9 Billion in Q1 2018, to $118 Million in Q1 2019.
Ryan Shea and Muneeb Ali, founders of Blockstack, have reportedly invested approximately $2 million and took 10 months to get approval from the SEC. Ali stated that Blockstack needed to create a protocol for conducting regulated ICOs through Regulation A+. According to reports, Blockstart applied to the SEC for approval in April to conduct a token sale worth $50 million.
SEC Regulation D has been used by some blockchain-based startups, including Blockstart. Token sales have been conducted under this regulation. Regulation D sales are not subject to SEC approval. However, they are only permitted for accredited investors. Companies that have at least $5 million in assets, and $1 million cumulative net worth.
According to reports, Blockstart received $47 Million in Regulation D funding in 2017 and an additional $5 Million from venture capital funding. According to WSJ, a crypto-based startup YouNow Inc. also applied for a Regulation A+ funding round.
bestadmin
