SEC Staff Offers Conditional Relief for Canton Coin Minting

The Securities and Exchange Commission’s Corporation Finance staff said it would not recommend enforcement action over specified programmatic minting of Canton Coin without securities registration, provided the activity follows conditions described by the network’s developer. In a November 3 letter, staff also described CC as a digital commodity based on representations made by Digital Asset Holdings, LLC, while stopping short of a legal conclusion on whether the token is a security. The conditional relief covers minting by Super Validators, Validators and application providers without registration under Section 5 of the Securities Act or Section 12(g) of the Exchange Act. The letter says the participants must act in the circumstances set out in Digital Asset’s October 30 request and rely on an opinion from counsel. The staff cautioned that changes in the facts could alter its position. The letter’s commodity characterization rests on the company’s account of how Canton operates and how CC is issued and used. Digital Asset represented that no central party controls the network, that the protocol governs minting based on network activity, and that the token’s value reflects...