SEC approves public token offering of $28 million

July 11, 2019 | AtoZ Markets – The United States Securities and Exchange Commission (SEC) has approved blockchain-based startup to initiate a public token offering round of $28 million under regulation A+.

The Wall Street Journal reported recently that Blockstack would start its approved token offering online on July 11.

Regulation A+ is an alternative to initial public offering (IPO), and was introduced in 2012 via the “Jumpstart Our Business Startups Act.”

It is tailored to suit those startups which need early funding, and one of its characteristics is that any member of the public can partake in a Regulation A+ funding round.

The step SEC took was not the first of its kind. However, what is new here is that this time investors will receive a token, rather than shares in the company.

What is initial public offering’s Regulation A+?

While Regulation A+ has more soft disclosure obligations than as with an IPO, it has two levels with hard caps on raised funds, maxing out at $50 million within a 12-month period.

As per reports, initial coin offerings (ICOs) have almost died out as a result of the crackdown the SEC started on the industry, for customer protection purposes as the SEC says.

ICOs, which helped cryptocurrency firms raise billions of dollars, as per media outlets, dropped from $6.9 billion in Q1 2018 to $118 million in Q1 2019, according to TokenData research.

It is worth mentioning that ICOs were in the headlines in the last period of time before the business fade out gradually, as fraudsters invented several methods of scamming investors.

In one of the most notable news AtoZ Markets once reported, the Canadian police froze the assets of the founders of blockchain services company Vanbex, as a precaution in the 2017 Vanbex ICO investigations that are going on for fraud claims.

The investigations had started in 2017 against an initial coin offering (ICO), that gathered raised $22 million, which was said to have been a scam.

The court documents dated March 13 read at the time that the company, led by Kevin Hobbs and Lisa Cheng, could raise $30 million CAD (about $22 million) worth of fiat and cryptocurrencies through the sale of a token named FUEL.

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