On July 10, 2019, the Securities and Exchange Commission (“SEC”) approved blockchain start-up, Blockstack’s $28 million public token offering under Regulation A+. Blockstack, a decentralized computing network, will commence its token offering on July 11, 2019. As part of the offering, an estimated $12 million in tokens will be allocated to Blockstack’s App Mining Program, which rewards developers who create the top-ranked applications within the Blockstack ecosystem.
According to a report by The Wall Street Journal, Blockstack founders Muneeb Ali and Ryan Shea reportedly spent 10 months and an estimated $2 million working to gain approval by the SEC. Ali explained that Blockstack developed a protocol from scratch to comply with requirements under Regulation A+, which is an initial public offering alternative that was created under the JumpStart Our Business Startups Act.
In short, Regulation A+ is a fast track for smaller companies to publically raise funds with less strenuous accounts and disclosure requirements than the traditional IPO offerings. However, increased concerns relating to fraud and lackluster post-IPO performance has deterred stock exchanges from listing Regulation + IPOs. Blockstack’s SEC approval may signal a new wave of regulated token offerings.