SEC Staff Views Canton Coin as a Digital Commodity in No-Action Letter

Staff in the SEC’s Division of Corporation Finance views Canton Coin as a digital commodity and said it would not recommend enforcement over specified programmatic minting without registration, based on facts presented by Canton Network.

The Nov. 3 response covers super validators, validators and application providers that mint Canton Coin under the network’s rules. It addresses registration under Section 5 of the Securities Act and Section 12(g) of the Securities Exchange Act. Canton disclosed the letter Nov. 4. The staff said its position depends on the facts presented and could change if those facts differ; it is not a legal conclusion.

The staff’s view rested on two representations from Canton Network: the coin’s value comes from the network’s programmed operations and supply and demand, rather than an expectation that core managers will drive profits, and the network has no centralized party as defined in the SEC’s interpretation.

Canton Coin launched without an initial coin offering or presale, while the network was already operating. Tokens are obtained by running network infrastructure or applications.