US SEC shows ‚leniency‘ with security token owners

In a Christmas gift to the cryptomime industry, traders who comply with existing rules while keeping security tokens in custody will not face enforcement action for the next five years.

US SEC shows ‚leniency‘ with security tokens ownersNOTHING

The US Securities and Exchange Commission is listening to the crypto community. At least, according to an announcement on 23 December, the SEC is responding to long-term industry complaints that no one knows who can handle security token trading.

The SEC is soliciting comments on the matter and reaching out to the crypto industry. Perhaps most notable is the fact that the commission’s announcement keeps traders safe from surveillance for the next five years:

„In particular, the Commission’s position, which will expire after a period of five years from the date of publication of this statement, is that a trader operating in the circumstances set out in Section IV will not be subject to enforcement action by the Commission. “

The „circumstances“ specified basically boil down to keeping security tokens at the primary focus of the transaction and doing due diligence in terms of cyber security and customer disclosures, including ensuring that each potential customer is aware that the exchange in question is dealing with digital assets also considered securities.

In connection with the announcement, the SEC is seeking comments on a number of issues related to the appropriate requirements for trading security tokens. One of the questions suggests that the commission is trying to allow investors to use non-equity tokens such as Bitcoin and Ether to pay for security tokens: „Should this position be expanded to include the use of non-equity digital assets as a means of payment for digital asset securities? „

Only a few weeks ago, several congressmen signed a letter to the SEC asking the commission for clarification on this matter. These parliamentarians have joined the chorus that has been coming from the cryptomime industry for a long time: for more regulatory clarity.

The SEC’s hesitation in issuing important statements is understandable in a sense. A regulator is unlikely to move as quickly as a technology developer. Consequently, many of SEC’s most conspicuous actions have had very limited application, including a series of prohibition letters for symbolic projects.

Despite long-term hopes that security tokens can update traditional stock markets, the industry has been plagued by isolated negotiations and low volumes.