Blockchain Startup Files with SEC to ‘Give Away’ Tokens

YouNow is a video platform based in New York that aims to reward active users with their own cryptocurrency. The startup has filed a Reg-A+ offering circular for its Props token (an ERC-20 token that runs on the ethereum blockchain) with the Securities and Exchange Commission (SEC). Reportedly, the company is not selling the token to investors, accredited or otherwise.

According to the company, the key difference between this token and other efforts is that “No funds will be raised through the public offering, created to allow compliant ‘mining’ of Props in [the] US,” YouNow will disperse millions of Props instead to users of its app. The filing is awaiting a response of possible approval from the regulator, and if that turns out to be the case, YouNow would have the qualification clearing them to distribute Props to content creators, network transaction validators and others without registering the tokens as securities would.

YouNow has previously raised $25 million through the sale of Props and via a simple agreement for future tokens (SAFT), $20 million of that revenue generated a legal structure devised at the height of the 2017 initial coin offering (ICO) boom. The 178 million Props that have been allocated for the current “give away” have a nominal price (of $24 million total or 13.6 cents apiece), YouNow asks only for participation in its platform as a consideration.

From the release

The Props Tokens cannot be purchased as part of this offering, but can only be earned by apps, users and validators that will contribute to the Props Network. YouNow, the first app on the network, intends to distribute a significant portion of its own tokens to millions of its users. Tokens are to be allocated to users based on their current status (“level”) on YouNow, which signifies the contribution they have made to the network to date. Upon qualification, YouNow users may earn Props Tokens by, for example, creating content on the app. Users hold Props to get in-app benefits and real upside potential.”

Their Props is backed by Union Square Ventures, Comcast Ventures, and Venrock, among others and they are all in on giving away tokens as grants to programmers on the platform and for popular users. Venrock’s David Pakman said, “Over the past two years, the team focused on launching Props in a manner compliant with US regulators and now, pending final approval by the SEC, there is the opportunity for apps to integrate and ‘mine’ a legally compliant digital token and obtain a stake, for both the apps and their users, in the network they contribute to,” and he added that “This visionary new model is ushering in a new era of transparent and more equitable distribution of value, and sharing that value with end-users.”

Being the first of its kind filing when it concerns public offering, YouNow is taking an uncommon route to compliance with the regulator. Hopefully, they get the approval they are so gunning for.

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Credits- John Biggs

 

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