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Blockstack, the open-source decentralized computing platform, has been given permission by the U.S. Securities and Exchange Commission (SEC) to offer a cryptocurrency token. The one-off approval for a “regulated” token paves the way for Blockstack to move forward with trying to secure $28 million in funding and could possibly indicate a changing sentiment among regulators in the country.

Anthony Pompliano was one of many to take to social media and announce the approval, stating on Twitter, “HERE WE GO!  @blockstack was just approved by the SEC to hold the first regulated token offering under Reg A+. Finally non-accredited investors can participate in investments that previously were only open to the rich.  The laws need to change, but this is [the] next best thing.”

To secure the approval, Blockstack had to spend about $2 million, according to an article in the Wall Street Journal. That money went toward the creation of an entirely new protocol for a digital token offering, which was a requirement for Blockstack to be able to be listed under Reg A+ guidelines. 

Blockstack had previously announced the possibility of launching a token sale, for which it hoped to raise as much as $50 million. It filed with the SEC in April to issue Blockstack Stacks (STX) tokens, a type of blockchain-issued security that is more flexible than what is typically found in an initial public offering (IPO). 

Being able to receive approval so quickly—less than three months for the SEC to weigh in a surprise—could be a sign that the financial regulator is trying to appear to be more open to crypto-based offerings. 

It has repeatedly come out against any type of crypto exchange-traded fund (ETF) and recently asserted that it would be difficult for any crypto-based securities product to be approved. However, Blockstack has found a way to make it happen and, if successful, could open doors to similar products. 

One of the fundamental differences with STX tokens is that they’re utility tokens and not security tokens. Utility tokens are issued to fund the development of the target digital currency, which can later be used to purchase goods and services offered by the crypto’s issuer. Security tokens are often viewed as a type of investment contract and, as such, as subject to more stringent regulatory oversight.

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