SEC Makes Historic Decision by Not Taking Action Against a Cryptocurrency Startup

- Advertisement -

According to Forbes, the Securities and Exchange Commission (SEC) has published its very first ‘No Action’ letter with relation to cryptocurrency startup TurnKey Jets. That sets an important precedent for the cryptocurrency industry.

A historic moment

The above-mentioned letter is the first case when the SEC assures the investors of a certain cryptocurrency-oriented startup that the tokens that were issued during an ICO are not securities. The watchdog specifies that the platform will be fully developed and operational during the token sale. On top of that, the TKJ tokens will be used for purchasing the company’s air charter services, which means that they are marketed for their utility. These were allegedly the two major reasons why TurnKey Jets didn’t pass the Howey test.

On June 12, as reported by U.Today, SEC Chairman Jay Clayton reiterated his stance on Ethereum, thus confirming that it’s not a security. Meanwhile, Ripple’s XRP is still in danger of a possible crackdown.

No clear guidance

Prior to that, the SEC cracked down on multiple ICOs, which is considered one of the reasons why this market has dwindled over the last year. There were plenty of blatant scams in the ICOs that only needed a white paper to rake in millions of dollars during the peak of the crypto craze. However, now it seems that the agency is changing its tune about crypto.

The SEC’s Bill Hinman claims that its recent decision will give ‘a good idea’ of how the regulatory agency will deal with other crypto-oriented businesses. However, it doesn’t explicitly state what crypto startups should do in order to not appear in its crosshairs. According to Hinman, decentralization is one of the key factors.
 



This post was originally published on UToday. Bitnewsbot curates, examines, and summarizes news from external services while producing its own original material. Copyrights from external sources will be credited as they pertain to their corresponding owners.

Previous Articles:

- Advertisement -

Latest News

Coinbase Base App Rebrand Sparks Zora Token and SocialFi Surge

Coinbase rebranded its Wallet to the Base App on July 16, sparking a surge...

Solana Holds $177 Support as ETF Delays Weigh, Eyes $205 Rebound

Solana (SOL) saw its price fall by 3.2% this week after a strong rise...

Astronomer Turns Viral CEO Kiss Cam Scandal Into Data-Driven Win

Astronomer, a data infrastructure company, faced a viral public incident involving its CEO and...

Japan’s Crypto Bottleneck: Regulation, Not Taxes, Drives Talent Out

Regulatory approval delays are causing crypto startups to leave Japan.A proposed 20% flat tax...

Solana Rallies 5%, Eyes $200 as Bulls Challenge $188 Resistance

Solana (SOL) has recovered, rising over 5% in 24 hours and 30% in the...

Must Read

How Much Money Do You Need To Start In Crypto?

TL;DR -If you are wondering How Much Money Do You Need To Start In Crypto, note that is less than you are probably thinking....