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Thursday, November 26, 2020

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Home Tech Crypto SEC gives OK to social media platform to issue stablecoin without registering...

SEC gives OK to social media platform to issue stablecoin without registering as a security

Document Analysis NLP IA

620
WORDS

WORDS
3:6
Reading Time

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neutral
sentiment

Sentiment0.088990161353798
objective
redaction

Subjectivity0.39778827233373
probably it's an affirmation
Affirmation0.26576576576577

Highlights

RELEVANT
FREQ, RAKE or TFIDF
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ORG
Entity
PERSON
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OTHER
Key Concepts (and relevance score)

Summary (IA Generated)

S.

Securities and Exchange Commission, or SEC, has issued a rare no-action letter in response to a request from a blockchain-backed platform over the issuance of a digital asset.

19 says that its Division of Corporation Finance would “not recommend enforcement action” against avatar social platform IMVU issuing its VCOIN digital asset under certain conditions.

As part of the terms of the staff recommendation letter, the SEC said IMVU would still be subject to Know Your Customer and Anti-Money Laundering regulations in addition having “specified limits” on VCOIN purchases, conversions, and transfers.

However, in an apparent first, the regulatory body stated that it would not recommend enforcement action against IMVU for making VCOINs available for their “intended purpose.

However, such no-action letters have only been issued twice for crypto firms.

In April 2019, the SEC confirmed it would not recommend enforcement action against aircraft company Turnkey Jet in the sale of its TKJ tokens.

A few months later, the SEC issued a similar letter for an 8th grader who wanted to release tokens for her crypto gaming company Pocketful of Quarters.

“This no-action letter is meaningful because unlike the other two, this is the first time an ERC-20 token is being blessed by the SEC — it’s saying ‘hey, take it off platform,’” John Burris, IMVU Chief Strategy Officer said to Cointelegraph.

”.

While Pocketful of Quarters and Turnkey Jet both had very limited use cases, IMVU is already an established platform, with virtual transactions used by roughly 7 million players monthly.

Because the SEC letter says the VCOIN tokens can’t be transferred to third-party platforms, IMVU users will be able to send them out of the virtual world for a 10% transaction fee and into a private wallet, where the company said it will buy them back as requested.


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