SEC staff call Canton Coin a "digital commodity" and say they will not pursue its minting, in a no-action letter a16z's Miles Jennings calls a clear pathway out of securities laws

The SEC's corporate finance staff have given the token behind the Canton Network, the institutional blockchain developed by Digital Asset, a pass under the agency's new approach to crypto. In a response dated November 3, the Division of Corporation Finance said it views Canton Coin as a "digital commodity" as the term is described in the Commission's interpretation, and that it will not recommend enforcement if the coin is minted programmatically by Super Validators, Validators and application providers without registration under Section 5 of the Securities Act or Section 12(g) of the Exchange Act.

The staff relied on the applicant's representations that the token's value is tied to the programmatic operation of the network and to supply and demand rather than to the managerial efforts of others, and that the network has no "central party." The letter, signed by Deputy Chief Counsel Jonathan Ingram, answers a request submitted on October 30 on behalf of Digital Asset, according to Defiprime. The request described a network that launched in June 2024 with no token sale or pre-mine, where minting rights follow measured network activity and 13 Super Validator operators, as of September 30, each hold one governance vote, with Digital Asset running two of them.

The response is explicitly an enforcement position: it rests on the facts the applicant presented, says different facts might lead to different conclusions, and gives no legal conclusion on whether the coin is a security. Miles Jennings of a16z welcomed the result on X, saying the SEC's token taxonomy and FAQs "have now created a clear pathway out of securities laws" and that network tokens are digital commodities, The Block reports. 21Shares launched the first US ETF with direct exposure to CC in May, and Digital Asset raised $355 million in June in a round led by a16z's crypto fund.