The SEC approves the second compliant token supply, and YouNow does not sell coins only for airdrops.

The US Securities and Exchange Commission (SEC) has just approved a second cryptocurrency startup to launch blockchain-based token supply activities.

Following yesterday's Blockstack, New York YouNow Video Streaming Application Inc. announced today that its Props Network has also been approved by the SEC to distribute Props tokens through Reg A+ exemption. This means that everyone can participate, not just “qualified investors”.


Reg A+ is one of the many exemption rules of the US federal securities law. This rule allows startups to raise funds and issue securities without registering as a public company. However, Reg A+ has opened up the sale process to the public, unlike the more common Reg D or S exemptions used in securities private placements.

For this reason, Reg A+ is subject to rigorous review and approval by the SEC. Prior to yesterday, no company in the cryptocurrency industry was approved by the SEC, so it was impossible to issue such digital asset securities.

But unlike Blockstack's token supply, YouNow's SEC approval is not actually a sale of securities, but rather a securities issue, which may explain why the company called Props "the first SEC-certified." Consumer-oriented crypto tokens."

YouNow has received support from companies such as Union Square Ventures, Comcast, and Venrock, and has received about $26 million in financing, so there is no shortage of funds. Instead, the company applied to the SEC to distribute its Props token (approximately $0.1369) to users as a reward for “in-app activities” such as creating content on its video streaming platform.

However, as Marc Boiron, a partner at FisherBroyles LLP, pointed out on Twitter, the company's filings with the SEC have many similarities to Blockstack. He wrote:

“Like Blockstack, YouNow believes that its network can move towards decentralization, and Props tokens will no longer be securities.”

In fact, the company has repeatedly stressed that Props Network's long-term strategy is "to create a decentralized network and economy for digital media content, making YouNow less and less influence on network decision making."

Although YouNow does not use the fuzzy concept of “sufficiently decentralized” to describe its ultimate goal, it clearly shows that this is the “potential, future outcome” of its network, with the tokens of Blockstack. Like products, it is a vague, quasi-legal difference.

However, as legal experts have pointed out when analyzing the supply of Blockstack tokens, this is easier said than done – and YouNow will face many of the same risks, including the possibility of being forced to register as a “consumer token” for securities. Become a public company.

However, the SEC's willingness to seek a compliant token sales and distribution approach with cryptocurrency companies is a positive sign, recognizing the gap between digital assets and existing securities laws.

Although the SEC has successively announced good news about crypto assets regulation, Boiron said he does not think this will mean that the SEC will be completely open.

Lawyer Gabriel Shapiro also agrees with this statement:

“I expect that this will still be a 'small stream' rather than a 'mountain outbreak' because each project is unique and the SEC will review them carefully, but over time, a series of practices and reflections will emerge. Make it almost a routine."

“Blockstack has definitely spent a lot of money on time and opportunity costs, legal and accounting costs, but they have opened up a path, and other projects do not have to bear excessive costs if they are also used this way.”