The SEC’s Division of Corporation Finance considers Canton Coin, the native token of the Canton Network, a “digital commodity” under its March interpretation of how securities laws apply to cryptoassets. SEC staff said they will not recommend enforcement action if the network’s validators and application providers mint the token programmatically without registering it. The position relies on Canton’s representations that the token derives its value from the network’s programmatic operation, supply and demand, and the managerial efforts of others, with no “central party” in the network. It follows DTCC’s launch of a tokenization service on Canton, which is used by institutions including Morgan Stanley, and comes after Digital Asset raised $355 million. The SEC letter is not a legal conclusion, however, and its scope depends on the facts presented by Canton.
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