According to the report, other members of the Crypto Ratings Council include Circle Internet Financial, Bittrex, Genesis Global Trading, Grayscale Investments, Anchor Labs and DRW Holdings’ Cumberland unit. The group continues to recruit participants, the report notes.
Major United States’ crypto firms such as Coinbase and Kraken teamed up to launch a rating system to jointly define which digital assets are securities.
Expected to officially launch on Sept. 30, the new crypto council will be publishing online ratings for digital assets on a scale of 1 to 5, where the highest value means that a certain token is considered as a security that cannot be issued, sold or traded by unregulated firms.
Crypto Ratings Council to launch on Sept. 30
In a move to provide more clarity for what tokens can be traded without the supervision of regulators, major U.S.-based exchanges formed the so-called Crypto Ratings Council, the Wall Street Journal (WSJ) reports on Sept. 30.
Security status: scale from 1 to 5
As such, Bitcoin is considered as “1”, as regulators publicly said that Bitcoin is not a security, participants reportedly stated.
Brian Brooks, chief legal officer of Coinbase, who reportedly conceived the rating system, emphasized that the question whether a certain token is a security or not is “one of the biggest uncertainties around crypto and the reason why more asset managers are not comfortable with it.”
Mary Beth Buchanan, Kraken’s general counsel, expressed hope that the U.S. Securities and Exchange Commission (SEC) will view the initiative as a positive step, claiming that the council aims to show the regulator the exchanges’ efforts to come to a decision on the matter.
Blockchain Association’s efforts
According to the WSJ, a number of companies participating in the council are members of the Blockchain Association, a lobbying group that backs a House bill that would exempt many cryptocurrencies from SEC rules. The firms reportedly briefed senior lawmakers on the matter.
On Sept. 26, SEC Commissioner Hester Peirce, who is also known as Crypto Mom in the community, expressed some frustration with the pace of the SEC’s regulation, calling the regulators excessively paternalistic. Peirce said:
“If you want a government that’s more forward-thinking on innovation, that means that if something goes wrong, you can’t go running back to the government and say ‘Hey, you didn’t protect me from myself!’ …I think we need to be a little less paternalistic.”