US SEC Approves Social Media Platform IMVU to Issue Stablecoin Without Registering as a Securities
Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina), Author: TURNER WRIGHT, reprinted by Odaily with authorization.
Cointelegraph Chinese (ID: CointelegraphChina)announcedCointelegraph Chinese (ID: CointelegraphChina)
, Author: TURNER WRIGHT, reprinted by Odaily with authorization.
SEC RareannouncedA no-action letter in response to a request from a blockchain-based platform to issue digital assets.In a letter published on November 19, the SEC stated that its corporate finance department recommended "no enforcement action against the social platform IMVU" and allowed it to issue VCOIN digital assets under certain conditions. The SEC will allow companies to issue tokens without registering them as securities.。
Cryptocurrency companies that issue their own tokens typically must comply with the SEC’s regulatory framework,
It turns out to be controversial
. The classification of "securities" refers to assets that rely on the work of third parties for profit. In order to comply with the no-action letter, IMVU needs to prevent its new stablecoin from looking like an investment opportunity, as Facebook did on its Libra stablecoin, for example.did wrong。
As part of the terms of the staff referral letter, the SEC said IMVU would remain subject to know-your-customer (KYC) and anti-money laundering (AML), in addition to “specific restrictions” on the purchase, exchange and transfer of VCOIN legal constraints. The no-action letter states that IMVU will need to make the tokens “available continuously in unlimited quantities at a fixed price of $0.004” and must not “promote or support the listing or trading of the tokens” on any third-party platform. Additionally, the company cannot use VCOIN sales proceeds to upgrade its network until the tokens are available.Apparently, however, the regulator stated that it recommended no enforcement action be taken against IMVU so that VCOIN could achieve its “intended purpose.” According to the platform, users can buy, earn and transfer tokens from IMVU and exchange them for fiat.This no-action letter expresses the SEC staff's opinion on enforcement, not a legal decision. However, such no-action letters have only been issued twice for cryptocurrency companies. April 2019,
SEC Confirms It Will Not Recommend Enforcement Action Against Aircraft Firm Turnkey Jet’s Sale of TKJ Tokens
a few months later,
SEC issues similar no-action letter to 8th grader
, a student looking to issue tokens for his crypto game company Pocketful of Quarters. However, both of these tokens are more conservative than VCOINs and are therefore approved because they do not allow tokens to be exchanged for fiat.BTCIMVU chief strategy officer John Burris told Cointelegraph: “Unlike the other two no-action letters, this one is significant because it’s the first time the SEC has approved an ERC-20 token and it’s saying ‘hey, get it off the platform ’. It will be allowed into the public eye, so to speak.”
While Pocketful of Quarters and Turnkey Jet have very limited use cases, IMVU is already a mature platform with approximately 7 million monthly players using virtual transactions. According to Burris, the SEC’s decision was based on building a “real proof case” for the broader cryptocurrency and blockchain space:
