SEC Gives Reg A+ qualification for Ethereum-based Token
On July 11, 2019, Props, an Ethereum-based blockchain token announced that it has qualified under Reg A+ by the U.S. Securities and Exchange Commission (SEC). Props is the second consumer-facing crypto token qualified by the SEC after Blockstack earlier this week.
YouNow, a U.S.-based live video streaming company with more than 47 million registered users, has been qualified under Reg A+ by the U.S. Securities and Exchange Commission (SEC) to start rewarding its loyal users with its native cryptocurrency called Props.
According to an SEC filing, initially, there will be a total of 187 million tokens distributed that will serve both to reward content creators which drive community engagement and to pay users who interact with the platform. The higher the number of tokens held, the more incentives will be available to users. Having more Props entitles YouNow’s users to access VIP status, buy exclusive items, enjoy special discounts or increase the purchasing power of Bars, the app’s proprietary credits.
The token is not exclusive to the YouNow platform. The Props Blockchain can be integrated into other applications via APIs, allowing people to export their tokens to external wallets. In this way, Props can be used on any platform that decides to accept them. At the moment, four partnered apps have been lined up, including xSplit, a 17 million-registered-user app for video game streaming.
According to the SEC-approved filing, the token was evaluated at $ 0.1369. However, Props aren’t currently redeemable for fiat currency as the company is still working to have them listed on Alternative Trading Systems (ATS) that work similarly to cryptocurrency exchanges.
This favors users’ engagement as the token utility remains within the platform, eliminating possible speculative waves. This could lead Props holders to develop the network and eventually, as the platform grows, demand for the tokens may rise due to a real need.
Two Years of Work
Adi Sideman, Props CEO, explained that they used the Regulation A+ (Reg A) to get SEC approval, “so that Props may be earned by, and provide functionality to, non-accredited investors, users, apps and validators, in compliance with U.S. regulations.”
However, this does not guarantee the correct functioning of the token as users could be overly convinced they’ll get rich by merely watching tons of musicians or comedians streaming on YouNow, completely misunderstanding the token system and overestimating its potential.
Props isn’t alone in their approach either. As informed by BTCManager; the United States SEC has given Blockstack clearance to raise capital under Regulation A+. It is not to be excluded that this model will be used by various companies in the near future to raise money or sharing stakes with their users.