Canton Coin (CC) rose 4% on Wednesday after staff in the US Securities and Exchange Commission’s Division of Corporation Finance said they view the token as a “digital commodity.” The staff also said they would not recommend enforcement action over its issuance without securities registration, provided Canton’s stated conditions are met.
CC traded at $0.098 at 10:27 am UTC, according to CoinMarketCap. Despite the daily gain, it was down about 4.2% over the previous week.
In a Tuesday no-action letter, SEC staff accepted Canton’s explanation that the token’s value stems from the network’s operation and demand for CC, rather than efforts by a central team to generate profits for holders. The letter addresses tokens earned through the operation of network infrastructure and applications.
Canton developer Digital Asset told the SEC that participants earn CC by running infrastructure and applications. The protocol determines how many tokens they can mint based on their activity.
Canton Network is a privacy-focused network that lets banks and financial institutions tokenize assets and trade and settle transactions across platforms. The SEC staff’s response is not a binding ruling on CC’s legal status.
In March, the SEC issued guidance distinguishing digital commodities such as Bitcoin and Ether from securities, while noting that the way such tokens are offered and sold may still fall under securities laws.
Sources: Cointelegraph.