By
Steve Muchoki
April 25th, 2024
Blockstack is likely to set a new precedence in the ICO Industry to be the first company to conduct its token sale under the SEC Regulation A+ framework.
In 2018, the ICO industry witnessed a major slowdown as regulator chipped-in. Although the industry helped crypto startups to raise funds directly from the public, it was largely plagued with scams and fraudulent schemes. The U.S. SEC has been working since long to give ICO tokens the status of ‘securities’.
However, there are still a few players in the industry looking to go for ICO under the SEC regulations. New York-based blockchain software provider Blockstack plans to raise $50 million in token sales ahead this year.
If approved, Blockstack will set new precedence to become the first company to file for the token sale under the SEC Regulation A+ framework. If approved by the SEC, Blockstack can raise capital from its subsidiary company Blockstack Token LLC. Also, after the SEC approval, Blockstack’s Stacks (STX) token will be available for purchase on stackstoken.com.
About Blockstack
Computer scientists from Princeton University have developed the Blockstack decentralized computing network allowing engineers to develop privacy-focused and secure applications. These applications give users complete control over their data instead of storing it with other third-party tech companies.
Blockstack is an open-source software platform with a community of over 7000 dedicated developers across the globe. So far, Blockstack has developed 80 such decentralized application catering to different use cases.
Before the idea of raising funds through ICOs, Blockstack has already raised $50 million from big investors like Union Square Ventures, Y Combinator, Lux Capital, and Naval Ravikant., under the SEC Regulation D.
Muneeb Ali, co-founder and CEO of Blockstack PBC, said in the press release:
“Blockstack has been in a confidential submission process with the SEC, making progress as we drive towards an SEC-qualified token offering. Recently, U.S. markets have been closed to crypto projects given regulatory uncertainty, and we believe in opening the U.S. market to innovation in this area.”
Ali further added that Blockstack has been working with “securities lawyers to create a legal framework that can enable blockchain protocols to comply with SEC regulations. Our framework is consistent with the latest SEC guidance released last week. Upon qualification, we believe that this offering may be the first time a blockchain project receives approval to access the public U.S. securities markets,” he added.
Massive Funding From Harvard University
According to the latest Bloomberg report, Harvard University plans to back Blockstack’s ICO token sale through its university endowment fund. The report notes that Harvard Management has already purchased 95.8 million Stack (STX) token at a price of $11.5 million. This investment is made through several affiliates of the Harvard Management Company. The SEC filing reads:
“The token advisory board consists of seven members. Three of the members, Charlie Saravia, Zavain Dar and Rodolfo Gonzalez are designees of affiliates of the Harvard Management Company, Lux Capital and Foundation Capital, respectively, limited partners of the QP Fund which have purchased an aggregate of 95,833,333 Stacks Tokens; the board also consists of four independent members, Koen Langendoen, Arvind Narayanan, Arianna Simpson and Catherine Tucker”.
Co-founder of crypto company Morgan Creek Digital – Antonio Pompliano – has lauded this move from Harvard.
BREAKING: Harvard’s endowment invested $5M – $10M directly into Blockstack’s token sale.
This means that one of the leading university endowments is comfortable holding tokens directly.
THE VIRUS IS SPREADING 🔥
— Pomp 🌪 (@APompliano) April 11, 2019
Receiving such a huge backing from reputed and credible institutions means that Blockstack can pull more institutional players to buy its token in the coming months, which might result in a possible domino effect.