The SEC's Division of Corporation Finance issued a no-action letter on Tuesday covering CC, the native token of the Canton Network, stating that staff view the token as a digital commodity. CC rose 4% on Wednesday after the letter was published.
What the letter says
SEC staff accepted the explanation that CC's value comes from how the network operates and from demand for the token, rather than from a central team's efforts to generate profits for holders.
- The division will not recommend enforcement action over CC issuance without securities registration
- Condition: tokens must be created under the conditions Canton described in its request
- The letter reflects the position of SEC staff and is not a binding ruling on CC's legal status
The letter covers only CC tokens earned by running infrastructure and applications on the network. It does not settle the token's legal status more broadly.
How CC is earned
Digital Asset, the company that built the Canton protocol, told the SEC in its Friday letter that network participants earn CC by operating infrastructure and applications. The protocol sets how many tokens each participant can mint based on its activity.
Canton is a privacy-focused network that lets banks and financial institutions tokenize assets, trade and settle across different platforms.
Who is behind Canton
According to CoinMarketCap, Digital Asset developed the Canton protocol and its Daml smart contract language. The company was founded by:
- Don Wilson - founder and CEO of DRW
- Yuval Rooz - ex-Citadel, ex-DRW, founder of DRW VC
- Eric Saraniecki - ex-DRW, co-founder of Cumberland
- Shaul Kfir - co-author of libsnark, co-founder of Bits of Gold
The Canton Network and the Global Synchronizer Foundation, managed by the Linux Foundation, were launched by a group of TradFi and crypto institutions. Members include Euroclear, Broadridge, Tradeweb, Calastone, SBI Digital Asset Holdings, Cumberland, Taurus and Digital Asset.
Market reaction
CC rose 4% on Wednesday after the letter was published. At 13:00 UTC, CoinGecko data showed the token at $0.098179, 49.4% below its all-time high of $0.194152.
Metric | Value |
|---|---|
CC price | $0.098179 |
24h change | +0.6% |
7d change | -3.2% |
Market cap | $3.93B |
24h trading volume | $14.94M |
All-time high | $0.194152 |
The 24h change in the table is CoinGecko's reading at 13:00 UTC, so it differs from the 4% move recorded right after the letter was published.