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https://blog.blockstack.org/stacks-cryptocurrency-expected-to-reach-non-security-status-in-the-united-states/
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STACKS CRYPTOCURRENCY EXPECTED TO REACH NON-SECURITY STATUS IN THE UNITED STATES

THE SUMMARY OF A NEW LEGAL MEMORANDUM ILLUMINATES A PATH FOR CRYPTO PROJECTS TO
ACHIEVE COMPLIANCE WITH U.S. FEDERAL SECURITIES LAWS

by Muneeb Ali
December 7, 2020
in Stacks token

→ Read coverage from Gertrude Chavez-Dreyfuss in Reuters

Today, Blockstack PBC released a summary of a legal memorandum supporting plans
for the Stacks cryptocurrency (STX) to no longer be considered a security under
U.S. law after the launch of the Stacks 2.0 blockchain. The summary is of a
memorandum prepared by Blockstack PBC’s independent outside securities counsel,
Wilson Sonsini Goodrich & Rosati, PC (WSGR). It outlines how the anticipated
change of status should permit mining to occur on the Stacks 2.0 blockchain in
the U.S. without having to register Stacks as securities, and how it will permit
U.S. persons to trade Stacks on non-securities exchanges.

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Historically, in light of legal uncertainties, Blockstack PBC has adopted a
conservative position and treated Stacks as securities in the U.S. under the
U.S. Supreme Court’s Howey test. Our dedication to compliance eventually led to
the SEC-qualified offering of Stacks in 2019, which was the first qualified
offering of a digital token in the U.S. At the time, Blockstack disclosed its
plan for Stacks to eventually become non-securities, which would permit mining
in the U.S. without registration of Stacks as securities and trading in the U.S.
on non-securities exchanges.

A key consideration under Howey is whether Blockstack PBC, or anyone else, plays
an essential managerial role that could reasonably be expected to be the driver
of potential returns for Stacks holders. If it does, then Stacks holders might
reasonably look to that essential manager for material information about the
tokens, thereby triggering U.S. federal securities law disclosure obligations.

STACKS 2.0 AND FUTURE NON-SECURITY STATUS

Since 2019, Blockstack PBC has been working on the Stacks 2.0 blockchain, which
will bring secure apps and smart contracts to Bitcoin, giving developers the
tools necessary to bring about a truly user-owned internet. 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. In addition,
neither Blockstack PBC nor any other entity will have material information about
Stacks, the blockchain, or the operations of the blockchain that is not also
widely known by others in the Stacks blockchain ecosystem.

For example, with the launch of Stacks 2.0, Blockstack PBC will no longer have
the ability to unilaterally make changes to the Stacks blockchain or issue new
Stacks tokens, and in general, it will have no control over any future
development of the blockchain and Stacks tokens. Any significant changes to the
Stacks blockchain will need to be approved by a majority of the voting power
from miners providing mining services to the blockchain network, and then
accepted by the Stacks community. In addition, Blockstack PBC does not plan to
be a miner on the Stacks 2.0 blockchain or to run an active node in the
“Stacking” program, where Stacks holders can earn Bitcoin by locking their
Stacks to the network.

Furthermore, the Stacks ecosystem has seen the organization of several new
independent entities that have become participants in the ecosystem, a wide
distribution of Stacks, and decentralization of decision-making power over the
network. Several developers have moved from Blockstack PBC to independent
organizations, while the Stacks Foundation has taken on the role of
Stacks-related governance, research and development, education, and grants, and
oversees network upgrades. More recently, Daemon Technologies and Freehold have
joined the ecosystem with Daemon working to build community in Asia and
supporting miners with new tools, while Freehold is empowering the Stacks
community to contribute to the Stacks ecosystem in meaningful, organized ways.

As Stacks 2.0 approaches completion, the role of Blockstack PBC as the primary
developer and builder of public infrastructure is ending. Blockstack PBC will
rebrand itself as Hiro Systems PBC. After the Stacks 2.0 launch, Hiro PBC will
focus on building developer tools on top of the public infrastructure and will
not be responsible for the Stacks blockchain.

In consideration of these facts, and many others, the summary of the memorandum
concludes that Stacks should no longer be considered securities under Howey
after the launch and adoption of Stacks 2.0.

--------------------------------------------------------------------------------

Forward-looking statements
This communication contains forward-looking statements that are based on our
beliefs and assumptions and on information currently available to us. In some
cases, you can identify forward-looking statements by the following words:
“will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology.
These statements involve risks, uncertainties, assumptions, and other factors
that may cause actual results or performance to be materially different. We
cannot assure you that the forward-looking statements will prove to be accurate.
These forward-looking statements speak only as of the date hereof. We disclaim
any obligation to update these forward-looking statements.

DOCS WEEK RECAP & WINNERS

OKCOIN PLANS TO LIST STX IN THE US AND SERVE AS A STACKS 2.0 LAUNCH PARTNER

MUNEEB ALI

Dr. Muneeb Ali is the founder of Stacks, a decentralized network that brings
apps and smart contracts to Bitcoin. He serves as the CEO of Hiro PBC, a Public
Benefit Corp that builds developer tools for the Stacks blockchain. He has
raised $75 million USD in funding from investors like Union Square Ventures, Y
Combinator, Lux Capital, Winklevoss Capital, and others. Hiro (formerly
Blockstack PBC) was featured in the CNBC's list of 100 promising startups to
watch. Muneeb received his Ph.D. and Masters in Computer Science from Princeton
University. His Ph.D. thesis was nominated for the ACM SIGCOMM dissertation
award by Princeton University. Muneeb gives guest lectures on cloud computing at
Princeton and his research publications have over 1,300 citations. He is one of
the main characters in George Gilder's book Life After Google and was a
technical advisor to the HBO show Silicon Valley.

Stacks token

STACKS CRYPTOCURRENCY NO LONGER TREATED AS A US SECURITY BY BLOCKSTACK PBC

by Muneeb Ali
January 21, 2021
0

Hiro PBC (formerly Blockstack PBC), filed a form 1-U report with the SEC
yesterday that summarizes the successful adoption of the Stacks blockchain by
independent miners and the board approval of management’s...

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