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<p>The <a href="https://www.crowdfundinsider.com/2019/04/146274-blockstack-files-form-1-a-to-issue-stack-tokens-under-reg-a/">years-long</a>
wait is over. The Securities and Exchange Commission (SEC) finally approved a <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+</a> token sale. Indeed,
Blockstack is already publicly <a href="https://stackstoken.com/">selling Stack
Tokens</a>. If it works, it will bring a new and better internet.</p>
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<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/07/Ron-Paul-GIF.gif" alt="" class="wp-image-3464" width="407" height="271"/></figure></div>
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<p>Heretofore, the SEC’s refusal to qualify a <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+</a> token sale <a href="https://www.crowdfundinsider.com/2019/07/149750-attorney-doug-ellenoff-comments-on-blockstack-reg-a-offering-chameleon-tokens-sometimes-they-are-securities-and-sometimes-they-are-arguably-not/">long
flummoxed</a> crypto-philes. <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+</a> is ideal for crowdfunding
crypto projects as it most aligns with the ‘Wild West’ <a href="https://www.thecrowdfundinglawyers.com/sec-unleashes-hurricane-ico/">ICO
craze of 2017</a>, while complying with securities laws. <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+’s</a> benefits are straightforward.
The $50 million maximum meets tech startup needs (although Congress will likely
soon raise it to <a href="https://www.crowdfundinsider.com/2018/03/130200-us-house-representatives-passes-legislation-raise-reg-cap-75-million/">$75
million</a>). Anyone can purchase <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+</a> securities. And
buyers can trade them instantly. Thus startups prefer it to <a href="https://www.thecrowdfundinglawyers.com/reg-cf/">Reg CF</a> ($1 million limit)
or <a href="https://www.thecrowdfundinglawyers.com/reg-d/">Reg D</a>
(accredited investors only). </p>
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<p>SEC <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg
A+</a> reluctance typified its stance toward shiny things under Chairman <a href="https://www.thecrowdfundinglawyers.com/shallow-end-jay-treads-water-while-reg-cf-sinks-but-is-help-on-the-way/">“Shallow-End
Jay”</a> Clayton. Mr. Clayton and his cohorts are <a href="https://www.thecrowdfundinglawyers.com/cryptomom-versus-the-machine/">the
“Machine”</a>: the credential-and-prestige obsessed cabal of East Coast lawyers
and fancy-degreed personages that land each year at name-brand federal agencies
to pilot the American economy while disclaiming responsibility for the results.
In the SEC crypto-sphere, <a href="https://www.thecrowdfundinglawyers.com/amy-winehouse-to-valerie-szczepanik-come-on-over/">NPC
Valerie</a> leads the way. But critics panned her main effort, <a href="https://www.thecrowdfundinglawyers.com/amy-winehouse-to-valerie-szczepanik-come-on-over/">13-pages
of crypto “guidance</a>,” as prolix and overreaching. </p>
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<h3 style="text-align: center;"><strong>Crypto Mom gets a win</strong></h3>
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<p>Commissioner Hester Peirce, aka <a href="https://www.thecrowdfundinglawyers.com/crypto-mom-to-npc-valerie-get-a-job/">Crypto
Mom</a> remains a contrary voice encouraging regulatory modesty. She has long criticized
the SEC’s glacial pace and risk-averse jeremiads, including with <a href="https://www.thecrowdfundinglawyers.com/crypto-mom-to-npc-valerie-get-a-job/">Reg
A+ token sales</a>. </p>
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<p>She won this round against the forces of Machine reaction. But the victory is incomplete. First, Blockstack represents one qualification, lots more languish. Some have waited years; others have given up. </p>
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<p>Secondly, even this victory is limited. Blockstack restricted
post-sale Stack Token releases. Buyers will get them piecemeal over 24 months.
Instant liquidity is a major <a href="https://www.thecrowdfundinglawyers.com/reg-a/">Reg A+</a> virtue. If all
companies must concede it for qualification it will hurt the market. </p>
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<p>Finally, the SEC leaves uncertain how these security tokens become
<a href="https://www.crowdfundinsider.com/2019/07/149750-attorney-doug-ellenoff-comments-on-blockstack-reg-a-offering-chameleon-tokens-sometimes-they-are-securities-and-sometimes-they-are-arguably-not/">utilities</a>
although all agree that is the plan. Blockstack says its board will decide and
pegs a year out as sufficient. No one knows how this will work. Will SEC Enforcement
ultimately decide when tokens are no longer securities? If so, that’s not
progress. </p>
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<div class="wp-block-image"><figure class="aligncenter is-resized"><img src="https://www.thecrowdfundinglawyers.com/wp-content/uploads/2019/07/Michael-Scott-GIF-No.gif" alt="" class="wp-image-3463" width="380" height="310"/></figure></div>
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<h3 style="text-align: center;"><strong>Blockstack is the anti-Facebook</strong></h3>
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<p>Blockstack’s vision makes its qualification huge. It wants
to change the system by removing online power from oligarchs and return it to users.
As stated in its <a href="https://www.disclosurequest.com/form/blockstack-token-llc/0001104659-19-029828/offering-circular">circular</a>,
“The ultimate goal in creating the Blockstack network is to enable application
developers to build and publish decentralized applications [Dapps] without the
need to maintain central databases, and for users of these decentralized
applications to retain control over their own data.” </p>
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<p>Author George Gilder explained the downsides of the current
model in <em><a href="https://www.thecrowdfundinglawyers.com/what-will-life-be-like-after-google/">Life
After Google</a></em>. Facebook, Twitter, Google/YouTube, and Amazon et al. control
the web by capturing the top of the “stack” where <a href="https://www.crowdfundinsider.com/2017/10/123842-next-coinlist-blockstack-initial-coin-offering/">internet
power</a> resides. </p>
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<p>“Free” services force users to relinquish security, property rights, privacy, control of adverts etc. And they are vulnerable to oligarchical whims. “Walled gardens” censor the masses, capture their data, and make it painful to leave. In turn, the companies respond to various pressure points including governments, activists, internal politics, shaming culture etc. </p>
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<p>As Blockstack co-founder Ryan Shea stated, “Apps were not
responsive to customers so much as designed to lock them in, you go onto the
net and Facebook or Google or Dropbox or Pinterest tor Amazon and all want you
to move in, giving them all your documents, music providing storage for your
life. Medical sites want to store all your health data. You have to petition to
it went you want it.” </p>
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<h3 style="text-align: center;"><strong>The Zuckerbergs will try to keep their power</strong></h3>
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<p><a href="https://www.thecrowdfundinglawyers.com/mark-zuckerberg-thinks-were-all-stupid-and-he-may-be-right/">Mark Zuckerberg</a> is the poster child. He became a multi-billionaire by repackaging and selling user data to the highest bidder. All the while he conspired with governments and activists to censor speech. And he is trying to recreate this model with financial transfers. </p>
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<p><a href="https://www.thecrowdfundinglawyers.com/mark-zuckerberg-thinks-were-all-stupid-and-he-may-be-right/">Libra’s
goal</a> is the entrenchment of very rich, powerful institutions that have much
to lose in a decentralized world. It is designed to kill blockchain’s future
and retrench oligarchic power for decades hence; the&nbsp;<a href="https://libra.org/en-US/">sappy videos</a>&nbsp;are PR. Whatever
Congressional assurances, Libra’s “gold mine” is access to crypto wallets it
creates and controls. </p>
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<h3 style="text-align: center;"><strong>But the Blockstack model keeps control at the bottom of the stack</strong></h3>
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<p>But within Blockstack’s network, users will move from Dapp
to Dapp without separate logins or remitting personal information. They will
store their data in encrypted clouds and release it when they want. &nbsp;</p>
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<p>Allowing users to control their own information keeps the power
at the individual level—the bottom of the stack. In the future tokenized world,
individuals will yield time and attention for token rewards. The oligarchs will
adapt or die. </p>
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<p>Qualification of Stack Tokens clears Blockstack’s last legal
hurdle. The sale precedes building its blockchain. Next comes mining, Dapp
development, and user rewards. The new internet is coming. &nbsp;</p>
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<p>The SEC should recognize what <a href="https://www.thecrowdfundinglawyers.com/what-will-life-be-like-after-google/">Gilder</a>
and the Blockstack community see. The online world is changing. Governments
should fiercely protect against fraud but otherwise step back and marvel at what’s
next. </p>
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<p>By <a href="https://twitter.com/thecrowdfundlaw">Jossey PLLC</a>
via <a href="http://www.thecrowdfundinglawyers.com">www.thecrowdfundinglawyers.com</a>
</p>
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