US first legally recognized DAO goes legal route to release utility tokens

US first legally recognized DAO goes legal route to release utility tokens

September 22, 2021

The first decentralized autonomous organization (DAO) to be legally recognized in the U.S. has filed with the securities regulator as it seeks authorization for two new tokens. American CryptoFed DAO LLC filed form S-1 with the Securities and Exchange Commission (SEC) to register Locke and Ducat tokens.

CryptoFed made headlines in early July when it became the first DAO to get legal recognition in the U.S., aided by the DAO bill that the digital currency-friendly state of Wyoming passed in March this year. The DAO gained its legal registration in 11 minutes after the DAO bill took effect on July 1.

CryptoFed is seeking to use the two tokens, Ducat and Locke. It indicates in its filing that it will not be selling any of the tokens in the offering. Rather, it wants to enable the secondary market for both to exist, refundable auctions of Locke to initiate, and the sale of Ducat tokens at a higher market value than the original purchase price direct from the DAO.

CryptoFed is registering both tokens as utility tokens, not securities, with Ducat as an inflation and deflation protected stable token with unlimited issuance, and Locke as the governance token whose maximum supply is capped at 10 trillion. 

Marian Orr, the CryptoFed CEO who previously served as the mayor of Cheyenne, Wyoming, explained, “To become a truly decentralised autonomous organisation, we intend to widely distribute a percentage of CryptoFed’s Locke governance tokens, free of charge, to contributors, including municipalities, merchants, banks, crypto exchanges, and individuals who will participate in the CryptoFed Ducat Economic Zone.”

CryptoFed, on its part, will act as the central bank in the ecosystem, managing the token supply to control inflation. 

“CryptoFed will conduct open-market operations on a daily basis which will change the supply of Locke and Ducat tokens over time. Locke and Ducat transactions will be fully transparent on the CryptoFed blockchain,” the company claimed in its filing.

As it awaits the SEC approval, CryptoFed will allocate its Locke governance tokens to contributors in its Ducat Economic Zone, it stated in its filing. 

“In the interim, Form S-8 filing will enable CryptoFed to grant restricted and untradeable Locke tokens to more than 500 persons. For clarity, all Locke and Ducat tokens will remain restricted, untradeable and non-transferable until the effectiveness of the Form S-1 filing is confirmed by the SEC,” it stated.

Meanwhile, on Bitcoin SV, Gorilla DAO is showing the world just what’s possible with a DAO on Bitcoin. The latest milestone is the debut of the GorillaPool, a truly distributed mining pool that mined its first block on the BSV blockchain earlier this month. The mining pool is growing quickly and already controls 3% of the total BSV hash power. 

Watch: CoinGeek Zurich panel, Tokenizing Assets on BSV

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