Crypto Rating Council declares Litecoin is not a security.

Yesterday, the newly formed Crypto Rating Council (CRC) announced its first batch of 20 digital asset classes. CRC is comprised of eight large companies in the sector: Coinbase, Kraken, Bittrex, Circle, Grayscale, Genesis, Cumberland, and Anchorage. The group was founded around a shared commitment to “the responsible growth and maturity of cryptocurrency markets and related financial infrastructure and trading services,” according to its website.

We formed the Cryptocurrency Rating Board to create a framework for consistently and objectively assessing whether cryptocurrency assets are likely to be classified as securities under U.S. federal securities laws.

Assets are ranked from 1 to 5, where 1 is defined as an asset with few or no characteristics consistent with being treated as a security, and 5 is defined as an asset with many characteristics very consistent with being treated as a security. defined. The CRC has made it clear that its rulings are not conclusive in nature and have not received approval from the SEC or any other government agency. It also does not take into account the legal status of assets outside the United States.

The CRC’s analytical framework is based on relevant laws and statements from the SEC staff related to digital assets, including the SEC’s “Digital Asset Investment Agreement Framework.” Neither the score nor our framework exhaustively addresses the legal and regulatory issues involved in conducting an analysis of whether a product is a security.

The group’s research found that only Bitcoin, Litecoin, Monero, and Dai are not securities and match the criteria for achieving a score of 1. This is something many users already suspected, but hearing it from a major player in the field will put you even more at ease. from now on. Founder of Litecoin Charlie Lee responds to this news:

Although it has been clear to most people that Litecoin is not a security, it is still good to see the Crypto Rating Council agreeing to this.

The CRC memo attached to these assets states that there will be no token sales and no decentralized development and use. On the other hand, on the other side of the scale assets including XRP, Polymath and Maker all scored above 4, with a further eight assets scoring 3.75. Securities represent an ownership position in a company or corporation that typically come with a variety of additional government regulations to protect investors.

Many of these projects were sold on their own because they were not securities or controlled by the companies formed to build them. BlockOne, the private company behind EOS (3.75 points), was recently fined $24 million by the SEC for conducting an unregistered ICO that raised $4 billion. If the SEC later agrees with the CRC’s ruling, many of the projects reviewed run the risk of being found to have committed securities fraud by misleading investors. This could result in large fines or even imprisonment for those involved, but perhaps the greatest harm is to the image and future of these projects.