Yesterday marked another historical first, in addition to the SEC’s release of its’ guidance framework for token offerings. A company called Turnkey Jet, Inc. was cleared by the SEC to run an ICO in the United States.
If you’re wondering why this is historic, the answer is as simple as the fact that the SEC had never publicly cleared an ICO with what is called a no-action letter, until this particular case. While this news broke yesterday, it bears mentioning again because of the conclusions that have been drawn as more information has come to light.
To recap, Turnkey has been allowed to run their ICO legally, provided that several specific conditions are met. Central to these conditions are the two ideas that the company’s native token must remain at the value of a dollarand funds from their ICO cannot be used for development.
If you’re looking at the difficulties that even stablecoins are having related to maintaining a dollar valueand thinking this is nearly impossible, then you’re thinking logically. Once it is mentioned that these conditions were agreed on by the company and the SEC after more than 50 phone calls and 10 letters, the process to get to a no-action letter becomes even more daunting.
Interestingly enough, according to CoinDesk’s piece today, Turnkey seems confident that it will succeed in spite of this stiff set of rules, though their lawyer has now stated that development of a native blockchain is out of the question.
Reportedly, instead, they will either use an enterprise solutionor go the route of the bulk of the ICO space that has come before them and hook their prospects to the Ethereum network. If they do choose the Ethereum network, however, it might be doubly hard to keep their token value stable, since Ethereum-based projects seem to have a history of exponentially growing in value as their user base grows.
In the end, it is advisable that any crypto group which is interested in pursuing a similar route to Turnkey’s makes sure to remember the difficulties that will be inherited at the end of the road, at least until the relevant regulatory frameworks evolve.
By: BGN Editorial Staff