The SEC on Wednesday approved a $28 million Reg A+ digital token offering by Blockstack. This would be the first regulated token to be approved by the SEC. Blockstack co-founder and CEO, Muneeb Ali, went on CNBC earlier today to talk about his startup’s unprecedented regulated token sale.
Check out clip from CNBC below, we’re also including the transcript in case you can’t see the video. All rights belong to CNBC and please refer all credits to CNBC.
Blockstack will hold the first regulated token sale This morning. The SEC cleared the twenty eight million dollars offering under a regulation A plus, which is, you know, as an alternative to an i p o. Join us now is Block Stack co founder and CEO Moon Ali, who also consultant Silicon Valley is, Well,
that was fun that I.
have not seen. You can talk to Mike about that Mike Mike. Enjoy that.
stuff. Then again, I’m not in Silicon Valley, but I understand it’s pretty.
low. At eleven minutes, it’s like an almost like an eye poem in Brighton. At eleven a. M. People could buy digital tokens.
even though I hate that analogy. But some people call it could encode the mini AIPO right, And I think the significance here is Imagine the Wild West ofthe equities markets before the nineteen thirty three securities regulations on. This is kind of like how the cripple markets are right now, right, and what we have done by working with the regulators is that we have worked with them to define a legal framework so that there can be more transparency and the U. S. Public markets can open up to this new type of assets. The cripple.
What exactly in this case with with,
block stack, What does my digital token give me the right to do in the future? Or why is it worth something to me?
So basically, what you’re buying is called a Stax token, and it’s used as fuel on the network to register a different type of digital assets. Or if you’re running smart contracts,
you need these stacks tokens to execute them. I think. Let me let me try to explain with that analogy.
Imagine that, you know, we as humans discovered Manhattan, the island, and one model is where a single company, let’s call them Facebook, ends up getting all the property, and everyone can live there for free. But they don’t have any property rights, right? So they don’t have arrested stake in the success ofthe whatever is happening. And in the Bloc sax case, every user has property rights. They have their own piece of land, they can own their own information and whatever business activity happens, everyone has a financial upside there. There’s no company in the middle,
and so this is you’ve built a decentralised network Yes, that is yours. Proprietary to,
no, no, it’s open source. Code open source.
It basically came out of research out of Princeton University. I did my phD there, So we’re a couple of computer scientists who built the core technology as open source software, and people can run it to basically.
be a part of this network. Like our company doesn’t control this now,
and they can develop an app on your network. And you would pay for doing that with one of your digital tokens.
Yes, so there are already,
believe, one hundred and seventy startups or applications that are already built on top of this network. And they include,
examples like alternatives to Google docks, to Instagram, to Facebook to linked into one password and a whole list of these applications that are already live. And people can start.
using them. That one person that they were watching him, they like when the toddler taking its first and they were so proud.
you got it.
But they’re so proud when they see that I am sort of.
let’s talk. Could we just move beyond this and just talk about whether Lib Ra was a positive for crypto or negative. I mean, it’s gonna usher and possibly more regulation. It’s not decentralise that Mark Zuckerberg is. You know, that’s all I need is for him to have his hands in my wallet and you know everything else. I’m not on Facebook, so he doesn’t. But it was a good or bad for the the this industry.
I think overall, it’s a good development. I’m cautiously optimistic in the sense that Facebook, the company, has done certain things in the past that would make you distrust the company. But this team is new. I actually no the leadership team there. I think they have really good intentions and they’re trying to do the right thing. With that said, at some point, Facebook would have to figure out that. Are there truly building an open system like block Stack? Or are they going to end up building a permission system like the current state of things? And they will have to figure out how to work with regulators? A small penalty? Why that,
for me that offsets any positive from from making it more,
more widespread? It just it doesn’t seem to have any of the key characteristics of Bitcoin for example, just East Central. I don’t see how you regulate Bitcoin. That’s the beauty of it. You can try, but you really can’t. Because everybody sort of owns it themselves. Right? They own there. They own the rights to it. That’s the,
Yeah, that’s all.
right. Because you don’t want there to be somebody saying Fiat Let it be.
I feel like I feel some initial signs of a big quake, Maximus in you and crypto people, we just love it.
I’m moving from four to five. I’m not quite that the evangelist that Although I understand that the function of what it allows you to do gives it a lot of inherent value.
Can I ask you about CEOs and this The token sale? This is very important. This is the first SEC sanction token sail under Greg A plus. A year ago, maybe you would’ve gone the icy air out of so many other companies did. In the first quarter of last year, there was something like seven billion dollars. A nice CEOs. In this quarter, it’s It’s ground to a halt. Virtually one hundred eighteen million in the first quarter. So what? What made you choose this route And do you think that this opens the way for other companies that would have other,
Otherwise, look to I c e o?
Do this the reggae?
Absolutely so First of all, I hate that term. I see you. I try to avoid it as much as possible.
and effectively. So we’ve been living in this market for more than five years. We raise venture capital were sufficiently funded, so we didn’t need to go The quote unquote ice here out just to raise capital. And plus, just by looking at the markets on. And there were so many bad actors, their misinformation and people were basically, if eh,
actively raising capital on half baked ideas.
That’s when we started researching that if we were to do it professionally, if you were to help mature the industry, what would that look like?
that? That’s when we did the first part off our token offering through a rig D offering that was limited do accredited measures and then large funds. So that was forty seven million round that be raised in two thousand seventeen. And since then, we’ve been working on the legal framework for opening up such offerings to the general public and that, as you can imagine, take sticks. Takes a lot of time because you’re working with the SEC.
You need, like, audited financials. And your auditors are sitting there looking at, like, What is this thing and how do we understand it? And how do we actually get comfortable with the with the regulator token offering like this?
So this really helps the quote unquote legitimate companies that would’ve gone thrice the route but might have been tarred by this sort of scam. The nature of the market?
Absolutely. I definitely think so. I think the work that we have done can serve as an example for other companies that are more professional and they don’t want to otherwise go down the eyes.