On the 3rd of November, the SEC Division of Corporation Finance reported that it views Canton [CC] as a digital commodity. Through a no-action letter, the division said that Canton’s value derives from the Canton Network’s operations and market dynamics.
Simply put, the SEC clarified that Canton doesn’t get value from profits generated by others’ efforts. Furthermore, the division added that the coin lacks a central party.
For that reason, the division noted that,
“ The division will not recommend enforcement action to the commission”
The decision reflects the division’s position based on facts presented by Canton. However, it does mean the SEC has made conclusions on whether the coin is a security.
The SEC decision was welcomed by market players. Miles Jennings, for example, added that the SEC’s token taxonomy from March and follow-up FAQs created a clear pathway out of securities laws.
Could this accelerate tokenization?
SEC’s decision provides legal clarity for institutions rushing to tokenize on the Canton Network. In fact, the network reported that institutions have been extremely active in recent months.
Firstly, DTCC launched its tokenization service with 20 participants, including JPMorgan and Fidelity for tokenized stocks.
Secondly, Uber piloted treasury cash moves using HSBC tokenized deposits and Franklin Templeton funds. Finally, Taiwan’s TDCC joined the Canton Foundation.
These institutions join an expanding base for tokenized assets. Canton Network reported that it leads the rankings for tokenized assets.
According to RWA.xyz, RWA value on Canton is more than seven times that of the next four chains combined, with a value of around $348.9 billion. Moreover, the rising value points to growing adoption and network acceptance by major institutions.
How did CC react?
On the charts, the market responded strongly positively to the SEC’s decision. Notably, Canton bounced back from a $0.093 slip to a local high of $0.0986.
On the daily charts, the altcoin is up 5% while the trading volume climbed 121% to $31 million. Despite these gains, the market is still experiencing strong selling pressure.
On the spot, for instance, the Sell Volume exceeded 9 million over the past 24 hours compared to 8 million in volume, implyinh that more sell orders were executed.
The same was observed on the perps side, with Sell Volume rising to 8.1 million on Binance.
The high volume indicated that investors have yet to flip with the trend and are mostly fearful of another drop, thus cashing out recent gains.
Under such circumstances, CC is unlikely to sustain the uptrend. If seller dominance persists, CC could pull back to $0.092.
However, if the trend reversal holds with investors turning optimistic over the legal clarity, CC will flip $0.1 and eye $0.11 in the short term.
Final summary
- SEC Division of Corporation Finance reported that it views Canton crypto as a digital commodity, saying it derives from the Canton Network’s operations and market dynamics.
- Canton reacted well, bouncing back from a $0.093 slip to $0.098, but sellers still dominate the market.
