Registered in Wyoming as a DAO, The American CryptoFed filed applications with the US SEC on Forms 10 and S-1 for registration and trading of the Ducat algorithmic stablecoin and the associated Locke management token.
The assets will play a service role in the EOS-based blockchain developed by CryptoFed with the DPoS consensus algorithm.
SEC Form 10 regulates the registration of securities on stock exchanges. The application requirement applies to firms with assets worth more than $10 million and with more than 750 shareholders.
Ducat and Locke
A company that does not meet these criteria can voluntarily submit an application. It will take effect automatically after 60 days. The American CryptoFed can count on a similar scenario, regardless of the position of the SEC. According to the applications, Ducat is a stablecoin protected from inflation and deflation. In addition, Ducat saves capital and conducts “free” transactions with high throughput.
Thus, the Locke management token will maintain the stability of the Ducat exchange rate and create rules for the ecosystem. “By using Locke to manage the Ducat rate, the DAO will be similar to the Fed (The Federal Reserve System) in its open market operations,” said Marian J. Orr, the CEO of CryptoFed.
Distribution of Locke will be free of charge among municipalities, merchants, banks, crypto exchanges and other DAO participants.
DAO will submit an application on form S-8
An application filed with the SEC on Form S-1 will allow Locke and Ducat to be traded and transferred.
CryptoFed did not rule out that if the regulator recognizes assets as securities, DAO will submit an application on form S-8. This is possible after the entry into force of the application for S-10, but before the approval of S-1. In such a scenario, the company will continue to distribute restricted and non-traded Locke in accordance with the incentive plan, according to Orr. Prior to the approval of the S-1 form, Locke and Ducat are not subject to sale and transfer.
Recall that in September, the head of the SEC, Gary Gensler, said that unregistered securities must receive regulatory approval, unless they are eligible for an exception.