The Crypto Rating Council has published its rubric for appraising whether or not a cryptocurrency is a security
The Crypto Rating Council (CRC) has released its rating sheet to consider whether a cryptocurrency is a security or not.
This is how Coinbase, Kraken, and other names decide which cryptocurrency are securities
The Crypto Rating Council (CRC) is an industry group that consolidates many of the biggest names in the crypto market to set the standards for deciding which tokens are securities. Members include Coinbase, Anchorage, Kraken, and Circle.
The newly published rubric is intended to provide an objective means of scoring token points. They will rely on a series of questions and answers to judge score ratings. The score is supposed to quantify how many percent of a cryptocurrency is a security. So far, CRC has published ratings for 27 tokens, but this is the first time the team has made public its methodology.
“We have updated the rubric in response to changing legal realities, specifically to take into account those facts, which seem to be most relevant in concluding whether an asset is likely to be viewed as a security in a court of law.”
CRC initially caught the attention of its fall 2019 launch with the aim of bringing together a unified front for the crypto industry. They are determined to set standards that comply with the Securities and Exchange Commission’s (SEC) standards. But the group hasn’t been very active lately, at least in public face-to-face. Its most recent set of token reviews happened in early 2020.
Debates over whether a given asset qualifies as security is quite complex. The SEC’s enforcement actions against token developers and issuers such as EOS and GRAM were largely responsible for the end of the ICO boom in 2017-2018.
Many industry insiders have called on the SEC to come up with its own standards for determining which cryptocurrencies fall under the commission’s jurisdiction. For example, in its own legal battle with the SEC, Ripple was pressured to release communications about commissions leading to the decision that Bitcoin and Ether are not securities, while XRP is. CRC, for its part, found XRP to be around 4 out of 5, with a score of 5 meaning the asset is most likely security.
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