By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) - U.S. live video streaming company YouNow on Wednesday filed with the Securities and Exchange Commission a public offering circular to distribute its own digital currency called Props.
The company said it does not intend to raise funds or sell the tokens at the public offering.
It comes after Facebook Inc (NASDAQ:FB) announced on Tuesday plans to launch its own cryptocurrency called Libra in efforts to expand into global payments and e-commerce. Speculation about Facebook's proposed token has helped resuscitate a cryptocurrency market in recent weeks that went through a slump last year.
Props is an open-source project built to reward application users and content creators with a financial stake in the network they contribute to. YouNow, with 47 million registered users, started the Props project in 2017.
Instead of being sold, Props tokens can only be earned by app developers, users, and validators that will contribute to the Props network. YouNow, which created the first app in the Props network called the Props live video app, intends to distribute a significant portion of its own tokens to millions of its users.
Props tokens under this offering will be issued on a continuous basis.
YouNow's offering will be done through the SEC's Regulation A+ exemption, according to YouNow's filing, which is available on the SEC website. Under the terms of the offering, a total of 178 million tokens will be distributed.
The Regulation A+ exemption enables small companies to offer and sell securities to U.S. investors via two tiers, either for $20 million or $50 million, each over a 12-month period. Like an initial public offering, Reg A+ allows companies to offer shares to the general public and not just accredited investors.
In its filing, YouNow said it is creating consumer-facing digital media apps called Props Apps, which will operate as traditional applications that may be downloaded and accessed by users in a manner similar to any regular apps.
"Those users -- they may be content creators, moderators, or they may be supporting the system financially -- that help grow the network can now be rewarded in a transparent and mathematical way through cryptocurrency," Adi Sideman, YouNow founder and chief executive officer, told Reuters.
"What we're doing is effectively bringing utility tokens to non-accredited investors and consumers in a way that is compliant with the SEC through this public offering."
(Fixes typographical errors in paragraph 5 to "app developers" and paragraph 11 to "content" creators)