SEC Division Calls Canton Coin a Digital Commodity in Key No-Action Letter

A division within the Securities and Exchange Commission has issued a no-action letter stating it will not recommend enforcement against Canton Coin’s (CC) programmatic issuance, referring to CC as a digital commodity.

The SEC’s Division of Corporation Finance granted the relief to the issuer, called CoinML LLC. In the letter, staff concluded that Canton Coins are “digital commodities and are not securities” under specific circumstances. The specific circumstance is the programmatic issuance of the coins through automated digital advertising auctions.

The decision is a notable, though limited, instance of an SEC staff division taking a commodity-oriented stance on a specific token. No-action letters are not binding on the SEC’s commissioners or other divisions, but they signal staff’s position in a particular case.

The letter is a departure from the SEC’s general posture under Chairman Gary Gensler, who has repeatedly stated his belief that most crypto assets outside of Bitcoin are securities. The action provides a potential regulatory path for projects that can demonstrate a decentralized, programmatic issuance model.