Republic, a crowdfunding and digital asset platform, launched one of the most interesting crypto offerings back in April. Republic announced the launch of Note digital tokens as a path to reward platform users who are engaged with their capital formation community.
In just a few days, Republic had freely distributed almost 2 million Note tokens. All you had to do was sign up and, if wanted a few more, invite some of your friends to have some Note tokens added to their digital wallet.
But the most interesting thing about Note is the intent of Republic to operate the digital asset as a security.
According to the small print, Republic states:
“Although the Note may not at this time constitute a “security” under our view of applicable laws and regulations, Republic is conforming to the standards of testing the waters under Regulation A of the Securities Act of 1933, as amended (“the Act”). This process allows companies to determine whether there may be interest in an eventual offering of its securities.”
Republic then expands on its vision for Note:
“If and when Republic conducts an offering under Regulation A, it will do so only once (i) it has filed an offering statement with the Securities and Exchange Commission (“SEC”), (ii) the SEC has qualified such offering statement and (iii) investors have subscribed to the offering in the manner provided for in the offering statement. The information in the offering statement will be more complete than the test-the-waters materials and could differ in important ways.”
So a lot of this is hypothetical now. But what Republic hopes to do is to “connect the Note to Republic’s entire present and future startup portfolio, entitling you to returns whenever any startup successfully exits.” Kind of like a VC fund but for the little guy.
Now that could be pretty cool. If Republic receives regulatory approval for Note, holders can benefit from successful startups while gaining immediate diversification of the whole Republic portfolio of companies. We will know more once a Form 1-A is filed with the Securities and Exchange Commission (SEC).
It is widely known within the digital asset sector that not a single Reg A+ filing that has mentioned, blockchain, crypto, digital asset, etc. has been qualified by the SEC. The regulators want to make certain they have all (or most of) the bugs worked out before they hit the go button. But expectations are that in the not so distant future, the SEC will start qualifying digital asset Reg A+ offerings. We would not be surprised if Republic is one of the first to receive SEC approval.
Crowdfund Insider has heard through the grapevine that Republic is pleased with the response to the Note Program so far.
A person with knowledge on the Note token project told us:
“User engagement and community building has seen a notable increase. It [has] given Republic the platform and the forum to engage our user base, and encourage them to join the mission and spread the message of entrepreneurship and investment for all. Republic is working on new perks and additional benefits to keep participants engaged.”
It will be interesting to see how Note evolves if the Reg A+ offering becomes a reality.