The first US VAO to apply for token registration
Wyoming-registered DAA The American CryptoFed has applied to the SEC on Form 10 and S-1 to register and trade its Ducat algorithmic stablecoin and associated Locke control token.
The assets will play a service role in an EOS-based blockchain developed by CryptoFed with the DPoS consensus algorithm.
Form 10 regulates the registration of securities on stock exchanges. The filing requirement applies to firms with more than $10 million in assets and more than 750 shareholders.
A company that does not meet these criteria may voluntarily apply. It will take effect automatically after 60 days. The American CryptoFed can expect a similar scenario regardless of the SEC's stance.
According to the applications, Ducat is an inflation/deflation-protected stabelcoin designed for capital preservation and "free" transactions with high throughput.
The Locke management token will be used to maintain Ducat's exchange rate stability and create rules for the ecosystem.
By using Locke to manage the Ducat exchange rate, the DAO will be likened to the Fed in its open market operations, said Marian Orr, CEO of CryptoFed.
Locke would be distributed on a pro bono basis to municipalities, merchants, banks, cryptocurrencies and other participants in the MAO.
A Form S-1 filing with the SEC would allow Locke and Ducat to be traded and transferred.
CryptoFed has not ruled out that if the regulator recognises the assets as securities, the MAO will file a Form S-8 application. This is possible after the S-10 application takes effect, but before the S-1 approval. In such a scenario, the company would continue to distribute restricted and non-traded Locke under the incentive plan, according to Orr.
Pending approval of the S-1 form, Locke and Ducat are not subject to sale and transfer.
Recall that SEC chief Gary Gensler said in September that unregistered securities must be approved by the regulator unless they qualify for an exemption.
In January 2019, Wyoming passed a law equating cryptocurrencies with money.
In December 2020, the Wyoming State Banking Board granted financial institution status to cryptocurrency startup Avanti. Earlier, the state had approved a similar application from bitcoin exchange Kraken.