The US Securities and Exchange Commission, or SEC, has issued a rare letter not to take action in response to a blockchain-backed platform’s request for a digital asset.
A letter dated November 19 from the Securities and Exchange Commission (SEC) said that the Department of Business Administration “will not recommend enforcement measures” in relation to tokens to the social platform IMVU, which releases its digital VCOIN assets under certain circumstances. The Commission will allow the company to deliver tokens without registration as a guarantee.
Cryptocurrencies that issue tokens often have to follow a securities and exchange framework that has proven controversial. The “security rating” is for assets whose profits depend on the activities of third parties. To stick to the rhetoric of passivity, IMVU needs the new stable currency so as not to become an investment opportunity, which, for example, prevents Facebook from doing a stable business with Libra.
As part of a letter of recommendation to employees, the SEC stated that IMVU will continue to comply with KYC and anti-money laundering regulations, and will also “set limits” on VCOIN purchases, transfers and transfers. The letter stated that IMVU needed to make the token “permanently available in unlimited quantities and at a fixed price” of $ 0.004, and would not “promote or support the listing or trading” of the token on any third party platform. In addition, the company could not use the VCOIN sales revenue to upgrade the network until tokens were available.
From a clear start, the regulator said it would not recommend enforcement measures against IMVUs to make VCOINs available for “intended purposes.” According to the platform, users can buy, earn and transfer fiat tokens from IMVU.
The letter expresses the statement of the Commission’s staff on enforcement and does not constitute a lawful decision. However, these bans were sent to two crypto companies only twice. In April 2019, the Securities and Exchange Commission (SEC) confirmed that they will not recommend enforcement measures against the airline Turnkey Jet when selling their TKJ tokens.
A few months later, the SEC sent a similar letter to an eighth-grader who wanted to issue tokens for his cryptocurrency company Pocketful of Quarters. However, these two tokens are approved on the grounds that they are more isolated than VCOIN, as they do not allow return of tokens.
“This talk of passivity makes sense because, unlike the other two lines, this is the first time the SEC has blessed the ERC-20 – it says, ‘Hey, get him off the stage,'” he told the Cointelegraph. That is, he is allowed to go crazy. “.
While Pocketful of Quarters and Turnkey Jet had very limited use cases, IMVU is already a well-established platform with standard transactions used by almost 7 million players per month. Boris suggested that the SEC’s decision was based on creating “true evidence” for the wider crypto space and blockchain:
“Our users are very comfortable using cash to buy digital currency and then use it together on the platform. We are very confident that it will be accepted. ”
Since the SEC announcement states that VCOIN tokens cannot be transferred to third-party platforms, IMVU users will be able to send them from the virtual world to a private wallet, as the company said they would buy them back as a required 10% transaction. pay. VCOIN is definitely not Bitcoin (BTC) – it will be sold at a fixed price, and the number of tokens can be increased later.
IMVU plans to start selling the token in a virtual environment from January.