- Crypto exchanges and investment giants come together to rate digital assets
Cryptocurrency exchanges and investment platforms have taken it upon themselves to determine which crypto asset is a security and which isn’t.
Coinbase, Kraken, Bittrex, Circle, Genesis, Grayscale, DRW Cumberland, and Anchorage have come together to create the Crypto Rating Council to decide which digital assets can and cannot trade on their platforms.
The framework results in a score between 1 and 5, with 1 meaning he asset has no characteristics of traditional regulated security and a score of 5 representing that an asset is strongly consistent with treatment as security. As per this framework, Bitcoin, Dai, Litecoin, and Monero has the least score of 1 while on the other end of the scale are Polymath (4.50), Maker (4.50), and XRP (4).
However, this didn’t go well with XRP community.
FUD ALERT!!! RT this widely!!!
Just today, there are articles surfaced concluded that XRP has several characteristics which deem as security. This so called “Crypto Rating Council” are formed by various cryptocurrency related companies which 𝐃𝐎𝐄𝐒𝐍’𝐓 represent the SEC!
— 🐼PandaRippleXRP🐼 (@RipplePandaXRP) September 30, 2019
“The Council’s ratings are performed independently,” and “not endorsed by the SEC, CFTC, or any government agency, developer team, or other third party, and they are not legal advice.”
The council will review more assets and might even develop similar tools for non-US jurisdictions.
The diverse group of leading crypto financial services firms as per the official website, are companies “committed to the responsible growth and maturation of cryptocurrency markets and related financial infrastructure and trading services.”
The members believe “practical compliance tools” can help the market participants support growth and adoption of the digital assets in the US and around the world. While the US SEC’s guidance has been helpful in alerting the crypto industry to complex legal issues, determining which asset is security or not “remains highly circumstantial.”
This complexity, they say has slowed the launch of new crypto assets in the US and as such decided to take matters into their own hands.