There is still a lot of confusion in the cryptocurrency sector, regarding which assets should be classified as securities and which ones shouldn’t. Every now and then, the United States Securities and Exchange Commission (SEC), seems to be in a clash or the other, with the teams behind these assets.
However, there seems to be some light at the end of the tunnel as some of the largest cryptocurrency exchanges have put heads together to bring the next best thing to a solution, to this problem.
The new partnership dubbed the Crypto Ratings Council, include Coinbase, Circle Internet Financial Ltd., Bittrex and Kraken have now published a list of digital assets and assigned ratings of 1 to 5, to them.
The lower the number assigned, the less likely the asset will be classified as a security. According to the Council, the ratings are solely done by the group without any influence from the token’s issuers. However, the teams behind these tokens are more than welcome to protest whatever scores assigned.
The group has also expressed some belief, that an effort like this will show that the sector is willing to abide by regulations as stipulated by authorities. According to Kraken’s general counsel, Mary Beth Buchan:
“It’s our hope the SEC will view this as a positive step. [This also] does show the SEC what each exchange is doing to come to a decision.”
So far, the Crypto Ratings Council has scored Bitcoin the lowest possible mark, 1.00. This means that it doesn’t run any risk of being categorized as a security. Ethereum has a 2.00 score, with XRP, Litecoin and EOS receiving 4.00, 1.00 and 3.75 respectively.
Hopefully, even though the rating was done outside of contribution from the SEC, it should give the sector some clarity on how to proceed on related issues.
For example, in a bid to not run contrary to the law, Coinbase has expressed that it always exercised considerable caution when it’s considering listing new digital assets. Things would probably be a lot clearer now.