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Offering Cryptocurrency Under Reg A+: Blockstack as a Fundraising Template

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Wednesday, November 20, 2019

Recorded event now available

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This CLE course will analyze the mechanics and securities law issues associated with the offering of digital currencies under Reg D and Reg A+. The panel will discuss the Blockstack offering recently approved by the Securities and Exchange Commission (SEC), what it suggests about capital raising for blockchain platforms going forward, and questions remaining about the SEC treatment of digital tokens.


On July 10, 2019, the SEC qualified an initial coin offering (ICO) by Blockstack PBC, marking the first time that the SEC has cleared a securities offering of digital assets. The Blockstack offering--made under Tier 2 of Regulation A--may provide other cryptocurrency companies with a roadmap for fundraising and the distribution of digital assets in compliance with the federal securities laws.

To date, issuers of digital assets have used Regulation D to comply with U.S. securities laws. However, since a token securities offering over the internet will involve a "general solicitation," companies have generally been forced to use Rule 506(c) under Regulation D, which limits the sale of tokens to accredited investors. By contrast, tokens qualified in a Reg A+ offering may be sold not just to accredited investors but also to any other persons for whom the tokens purchased do not exceed 10% of the greater of their annual income or net worth.

Blockstack is planning on the eventual transition to an independent, decentralized network that it does not control. According to recent guidance from the SEC, a token may lose its character as a security if it is usable in a decentralized network that is not dependent on the managerial efforts of another person. In essence, Blockstack's tokens may convert from a security into a digital asset that is no longer subject to securities registration or reporting requirements. Such a development would enable trading of the tokens on existing cryptocurrency exchanges.

Listen as our authoritative panel examines the offering of digital tokens under Reg D and Reg A+ with a particular focus on the Blockstack transaction. The panel will also discuss how such tokens might cease to be subject to securities reporting requirements as the underlying blockchain evolves into a truly decentralized platform.



  1. Introduction--SEC treatment of digital assets as securities
    1. The Howey test
    2. Recent SEC no-action letters finding that tokens are not securities (TurnKey Jet and Pocketful of Quarters)
  2. Mechanics of the Blockstack offering
    1. Initial offering under Reg D and Rule 506(c)--accredited investors only
    2. Reg A+ offering--first of its kind approved by SEC
    3. What investors receive--tokens, not stock
  3. Eventual transformation of tokens from securities to non-securities
    1. Transfer of control of the blockchain
    2. Exiting the reporting requirements of Reg A
  4. Unanswered questions


The panel will review these and other critical topics:

  • As a threshold question, can your digital assets avoid “securities” status under Howey?
  • What is the significance of the Blockstack offering; is it a template for offering digital tokens going forward?
  • What are the advantages of Reg A+ over Reg D, and what are the limitations?
  • How might the transfer of control of a blockchain affect the treatment of the tokens used on that blockchain for securities purposes?


Staines, Mark
Mark A. Staines

Kutak Rock

Mr. Staines focuses his practice on corporate governance, mergers and acquisitions, securities regulation and corporate...  |  Read More

Witt, Kenneth
Kenneth S. Witt

Kutak Rock

An experienced corporate and securities attorney, Mr. Witt represents energy and technology companies and institutional...  |  Read More

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