OKCoin said it will become the first U.S.-based crypto exchange to list Blockstack PBC’s stacks token (STX).
STX is expected to be available on OKCoin, an exchange with daily volume of around $30 million, as soon as Jan. 14, 2021, upon the completion of the Stacks Blockchain 2.0 launch, the company announced.
"After our compliance team carefully reviewed the Blockstack statement of decentralization and the PoX mechanism, we've concluded it has successfully transitioned from a security to a utility token, and thus OKCoin can and make STX available to U.S. users for the first time," according to OKCoin’s chief compliance officer, Megan Monroe-Coleman, in an email to CoinDesk.
That presumes the U.S. Securities and Exchange Commission doesn't object to the STX transition and so OKCoin can be involved. The implication is explained in detail in a Twitter thread by Marco Santori, chief legal officer at crypto exchange Kraken.
Other than purchasing, trading and a scheduled airdrop of STX to OKCoin’s users, the listing of STX will enable OKCoin users to earn bitcoin as a reward by locking their STX on the Stacks Blockchain 2.0 network. It will be the first token to do so, said Haider Rafique, the chief marketing officer at OKCoin, in an interview with CoinDesk.
On Monday, Blockstack’s co-founder and chief executive, Muneeb Ali, outlined how STX could become a non-security, presumably with the expectation that the SEC wouldn't bring an enforcement action against the company upon completion of the Stacks Blockchain 2.0 and anticipated early next year.
Blockstack and its platform’s utility token STX became famous in 2019 when the company launched the first SEC-approved token sale through the securities market. But with the company retreating from a central role in issuing new STX, it has made the argument the token should no longer be considered a security and thus should become tradable by investors in the U.S.
“It gives most of these decentralized protocols a framework to operate in a way that they can transition from being a security to ultimately a utility token,” Rafique said. “Blockstack has paved the way in a framework to be able to do so.”
Stepping back, Blockstack aims to rival Google with a suite of decentralized applications that don’t fall prey to the data collection conducted by the Mountain View, Calif., tech giant. Blockstack even rolled out an anti-Google branding campaign in 2019: “Can’t be evil.” To date, however, adoption has remained niche.
OKCoin's aim
In the email to CoinDesk, OKCoin’s Monroe-Coleman said the legal memorandum revealed by Ali shows that retail users and investors in the U.S. can be “more confident in the legitimacy” of Blockstack’s transition from “a regulated security token to an open-source, decentralized blockchain protocol.”
The partnership between OKCoin and Blockstack came as a result of the two companies’ shared values of building and supporting Bitcoin’s core development, said Rafique, who also worked closely with the team behind Blockstack at his previous company, crypto firm Blockchain.com.
Version 2.0 of the Stacks blockchain will require miners on the network to post bitcoin to mine a block, as CoinDesk previously reported. That bitcoin would then get shared with nodes maintaining a copy of the ledger.
OKCoin, founded in 2013, migrated its core business to San Francisco after a 2018 crypto crackdown by the Chinese government. The exchange has since rebranded itself as a regulatory-friendly exchange with licenses approved in countries including the U.S. and Japan.
The exchange also launched a funding program earlier this year to support Bitcoin Core developers, whose open-source coding improves the network.
UPDATE (Dec. 9, 2020, 14:17 UTC): This article has updated to clarify the SEC isn't expected to explicitly approve the STX 2.0 token as not a security.