Registered in Wyoming as a DAO The American CryptoFed filed applications with the SEC on forms 10 and S-1 to register and trade the algorithmic stablecoin Ducat and the accompanying governance token Locke.
The assets will serve a supporting role in the CryptoFed blockchain built on EOS with a DPoS consensus algorithm.
Form 10 regulates the registration of securities on stock exchanges. The filing requirement applies to firms with assets exceeding $10 million and with more than 750 shareholders.
A company that does not meet these criteria may file voluntarily. It will take effect automatically after 60 days. The American CryptoFed may expect a similar scenario regardless of the SEC’s stance.
According to the applications, Ducat is an inflation/deflation-resistant stablecoin designed to preserve capital and enable high-throughput, “free” transactions.
The governance token Locke will be used to help maintain Ducat’s price stability and to establish rules for the ecosystem.
“Using Locke to manage Ducat’s price, the DAO would resemble the U.S. Federal Reserve in its open-market operations,” said Marian Orr, CEO of CryptoFed.
Locke will be distributed free of charge among municipalities, merchants, banks, crypto exchanges and other DAO participants.
The SEC filing on form S-1 will allow trading and transfer of Locke and Ducat.
CryptoFed did not rule out that, should regulators classify the assets as securities, the DAO will file for Form S-8. This is possible after the S-10 filing becomes effective, but before S-1 approval. In such a scenario, the company will continue to distribute restricted and non-tradable Locke in accordance with the incentive plan, according to Orr.
Before the S-1 form is approved, Locke and Ducat are not subject to sale or transfer.
In September, SEC Chair Gary Gensler said that unregistered securities must receive regulatory approval unless they are exempt.
In January 2019, Wyoming passed a law equating cryptocurrencies with money.
In December 2020, the Wyoming State Banking Board granted a status of a financial institution to the cryptocurrency startup Avanti. Earlier authorities approved a similar application from the Bitcoin exchange Kraken.
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