Blockstack announces plans to raise $50M in a SEC-regulated token offering

Blockstack, a decentralized computing network, is raising a new round of financing.

Rejecting the traditional Initial Coin Offering path taken by other crypto startups, Blockstack is working with the Securities and Exchange Commission to conduct its $50 million token offering under the SEC Regulation A+ framework. If approved, this could be the first SEC-qualified token offering of its kind. As part of the sale, Harvard's endowment fund, Lux Capital, as well as Foundation Capital and other individual investors have agreed to purchase approximately 96 million Stacks tokens at a price between $0.12 and $0.30 each.

“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. markets to innovation in this area.” Muneeb Ali, co-founder and CEO of Blockstack said in a press release. “We’ve 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 guidelines released last week.”

“This can potentially set a precedent for others in the industry, not just for public offerings, but also as a path to launch new public blockchains and establish a path to bootstrapping decentralized ecosystems,” Ali added.

Blockstack was founded by Ryan Shea and Ali in 2013 while the pair were students at Princeton University. It was there they conceived a decentralized identity system that replaces how certain centralized parts of the Internet work. They called it Onename, a nod to their belief that future users would use a single name (or identity) to access the applications and services built on their system, before rebranding it to Blockstack.

In 2017 Blockstack raised a $52 million round through a token sale on CoinList. Since then the firm has launched its native blockchain, the Stacks protocol, and has onboarded more than 80 decentralized applications to build on its platform.