On the 10th July, it was
reported that the Securities and Exchange Commission (SEC) has approved Blockstack’s $28 million token offering. In the past the SEC has been strict about blockchain based coin offerings, having sued firms over unregistered ICOs. Importantly, the Blockstack tokens do not represent shares in the company and are utility tokens.
However, Blockstack applied for and won approval under Reg A+. It is a
2015 SEC amendment to legislation which allows companies to raise up to $50 million without registering as securities, aiming to encourage employment and support new businesses. Registering is not only expensive but sometimes a point of contention among firms.
Companies such as
Kik, sued by the SEC last month, believe that their ICO was not the sale of securities as their blockchain based tokens had other uses besides investment. The SEC disagreed and claimed the $100 million Kik raised was unlawful.
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