The SEC’s corporate finance staff gave Canton Coin minters a conditional response on registration under two securities laws, while describing the asset as a digital commodity based on the company’s request.
In a Nov. 3 letter, the Securities and Exchange Commission’s Division of Corporation Finance said it would not recommend enforcement action if Super Validators, Validators and application providers mint CC programmatically without registration under Section 5 of the Securities Act or Section 12(g) of the Exchange Act, provided the activity matches the circumstances Digital Asset Holdings, LLC described in its Oct. 30 request.
The position applies if participants mint as described while relying on counsel’s opinion. The letter says a change in the facts could alter the staff’s position, and it does not provide a legal conclusion on the issues raised.
The staff’s digital commodity view drew on Digital Asset’s account of the network’s design and the coin’s role. The company said there is no central party controlling the network and that CC’s value reflects programmed network operations and market supply and demand, rather than expected profits from another party’s managerial work. Those points are company representations in the request.
Digital Asset said CC has been minted based on network activity since the Canton Network launched in June 2024. The company said the coin pays Global Synchronizer transaction fees and that CC paid as fees is burned. Super Validators, Validators and application providers can earn newly minted CC through network activity, according to the request. It also says the allocation increasingly favors application providers to encourage application development.
BitGo announced electronic trading for CC with settlement through its Go Network in March, as EconoTimes previously reported. The SEC letter addresses only the minting circumstances described in the request; it does not establish a general exemption for other CC activity.
