US-based Crypto Rating Council launches founded by leading firms

Today, the launch of The Crypto Rating Council was announced, which consists of leading U.S. crypto financial services firms committed to the responsible growth and maturation of cryptocurrency markets and related financial infrastructure and trading services.

The Crypto Rating Council was founded to create a framework for consistently and objectively assessing whether any given crypto asset has characteristics that make it more or less likely to be classified as a security under the U.S. federal securities laws. ‍

The important question of whether any given digital asset is a security, as opposed to a commodity, a currency, or something else, informs critical licensing, registration, and operating obligations for financial services firms that support cryptocurrency.

The U.S. Securities & Exchange Commission has issued guidance that some crypto assets may be securities while others may not be. While the SEC’s guidance has been helpful in alerting the industry to complex legal issues, determining whether any particular token is a security remains highly circumstantial and difficult to resolve even with the help of leading legal and technical experts. This complexity has led to expensive, redundant, and frequently inconsistent compliance analysis among financial services firms and has generally slowed the launch of new cryptocurrency assets in the U.S.