As Cointelegraph reported two weeks ago, the SEC issued a rare letter of inaction in defending a new VCOIN based on the blockchain IMVU.

VCOIN is only the third digital token to receive this legal protection from the US Securities and Exchange Commission, making it an exciting experience. The Securities and Exchange Commission is very active in charging fines for initial currency deals that they consider unreported securities deals, but they are more reluctant to define what is not considered securities – something Commissioner Hester Pearce pointed out last night. However, speech inaction is not the same as the rule of the SEC or law of Congress.

The protection that a letter of inaction provides applies only to the case in question. It can also disappear if the VCOIN deviates from the standards shown in the letter. There is definitely a narrow margin for VCOIN.

Michael Gettlitz, who leads the blockchain and digital real estate practice at Crowell & Moring, explained to Cointelegraph:

“I think VCOIN is a little different from your regular code offering because VCOIN revenues weren’t supposed to be used to fund network upgrades and the entire network was developed. I think there is an important difference between VCOIN and some other products.”
The problem of using the money from selling tokens to create an unfinished network was pivotal to the SEC shutdown of the planned Telegram network.

While the letter of inaction does not formally advocate other projects that follow the same principles, it does provide a template for what the SEC is looking for in the future. Getlitz explained the main factors:

“The currency can be used immediately at the time of sale. There were AML / KYC checks. There were restrictions on buying, transferring and transferring. This is a simpler message and does not require action than some of the more sophisticated proposals: I sell a coin to use the proceeds to grow my network, which has not been developed.” It’s completely different yet. It’s completely different. ”
However, VCOIN is by far the most ambitious project the SEC has blessed. It is a token that can be freely transferred to and from the US dollar for the 7 million IMVU users.

It’s also worth noting that VCOIN is designed to be a kind of stablecoin, but without an official handle for reserve assets. IMVU promised to buy and sell VCOIN for a fixed price of $ 0.004. Philip Mostakis, a former SEC advisor and current attorney for Seward & Kissel, cited this as a development: “The fact that the SEC has issued a letter of no action on a symbol that can be traded for is encouraging.”

It is especially important for VCOIN tokens to be able to leave the platform. Previous hibernation emails for tool tips had a tighter silo. The agreement with the SEC states that VCOIN’s price stability will prevent these platforms from becoming an opportunity to make money. To claim:

“While IMVU will not promote or support trading with VCOINs on third-party trading platforms, the convertible nature of VCOIN means that it can be transferred from the platform bilaterally and onto a third-party trading platform. However, it still makes no sense for it to adopt VCOIN buyers have the opportunity to sell VCOIN at a higher price to a counterparty off the platform.
Mostakis explained how VCOIN price stability avoids rating securities:

“The fact that the supply of VCOIN will not be limited in any way, and that IMVU will continually sell VCOINs and take back them at a fixed rate, has, in general, solved the stock issue to a large extent. The measures identified by IMVU in the purchase letter or transportation restrictions would have been granted to officials SEC is an extra convenience, but the crux of the matter, in my opinion, was the unlimited supply and the fixed price. ”
While VCOIN represents an interesting legal assessment for cryptography, the token itself is not quite a classic cryptocurrency because the function is very concise and clearly central to the max. Many in the industry, as well as the SEC, want tougher guidelines for creating new ventures.

Source: CoinTelegraph

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