Blockstack’s Stacks (STX) to Lose Security Token Status Once Its Blockchain 2.0 Launches
Blockstack PBC, a decentralized computing network innovation, has published a legal memorandum to support the transition of its native token Stacks (STX) from an SEC recognized security to a non-security. According to the publication, the legal memorandum was prepared by Blockcstack’s independent counsel, Wilson Sonsini Goodrich & Rosati, PC (WSGR).
The project plans on launching its decentralized blockchain network, Stacks 2.0, in early 2021, after which the mining and trading of its native token should commence. A shift from its security status means that Stack token users might get an opportunity to trade this ‘utility’ token in U.S based crypto exchanges like Coinbase, Binance, or Kraken.
Since last year, the Blockstack native token has been considered a security by both the firm and the SEC. Blockstack is, in fact, a pioneer firm to raise funding through the SEC Regulation A+ crowdfunding exemption; the company raised $23 million in the 2019 token sale. It now seems that the scheduled launch of stacks 2.0 has triggered the project to go decentralized on all fronts.
A New Dawn?
Blockstack plans to stop filing extensive SEC reports; instead, the firm will file for an exit report once stacks 2.0 makes its debut. The company’s CEO Muneeb Ali highlighted that,
“Upon the launch of Stacks 2.0, Blockstack PBC anticipates that neither it nor anyone else will play an essential managerial role under Howey because the operation and governance of the Stacks 2.0 blockchain will be so diffuse and decentralized.”
While the legal memorandum is a supporting pillar of this transition, the SEC is yet to greenlight Blockstack’s token shift to abandon its security status. Muneeb also told Decrypt that it would be up to crypto exchanges on whether to list the STX token,
“I’ll leave it to the exchanges to make their own decisions and announcements.”
Notably, Blockstack intends to rebrand to HIRO PBC, where its focus will be creating developer tools while the Stacks blockchain runs in a decentralized ecosystem.