Blockstack, a blockchain startup that wants to create a decentralized app ecosystem, has seen its application to hold the first ever Regulated Token Offering (RTO) approved by the Securities and Exchange Commission (SEC). The approved fundraise is the first of its kind and could provide young cryptocurrency businesses with a template for future approval. The application came at a cost however – almost $2 million and ten months’ work – but it seems to have been worth it.
— Blockstack (@blockstack) July 10, 2019
Extra Legitimacy for Blockstack
Blockstack’s application was approved under Regulation A+, an alternative to an initial public offering (IPO) meant to help new businesses raise capital. With everything already in place for the RTO, the company plans to launch the token sale imminently. The RTO is for developers who intend to use the Blockstack network, with Stacks (STX) tokens being the currency to be used on the platform. Gaining SEC clearance is a huge deal for Blockstack and will give their token an extra layer of legitimacy and should help the token sale immeasurably. 40 million STX will be sold at $0.30 each, while another 40 million will be held in reserve to allocate to developers.
A Brave Sacrifice
With the ICO boom a distant memory, far fewer blockchain startups have the ability to stump up $2 million and give up almost a year of their time to gain SEC approval in the same way Blockstack did. When it comes to revolutions, the first ones through the door are usually the ones who get hit the hardest, but they pave the way for those that come after. It is to be hoped therefore that Blockstack’s experience will show the SEC where improvements can be made in the process in order to encourage blockchain entrepreneurs and not stifle innovation as many have accused U.S. authorities of doing.