SEC Guidance: Certain USD Stablecoins Deemed Not Securities, Crenshaw Dissents
- SEC staff guidance: Certain USD-backed stablecoins (‘covered’) not deemed securities
- Criteria: 1:1 peg/redeemability, low-risk liquid backing; mint/redeem needs no SEC regulation
- Commissioner Crenshaw dissents, citing legal flaws, understated risks, few qualifiers
The U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance has issued a new guidance on stablecoins Friday, providing clarity while the Congress is still drafting the broader crypto legislations.
The guidance introduces the term “covered stablecoins,” defining a specific category deemed not to be securities under federal law.
Defining ‘Covered Stablecoins’ & Legal Implications
According to the SEC staff guidance, “covered stablecoins” meet three criteria: they maintain a one-to-one value with the U.S. dollar, are redeemable for USD on demand at par, and are backed by low-risk, highly liquid assets.
Crucially, the guidance determines that these specific stablecoins do not qualify as securities. This means activities related to minting and redeeming “covered stablecoins” likely do not require SEC registration. The determination references legal precedents like Reves …
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SEC Guidance: Certain USD Stablecoins Deemed Not Securities, Crenshaw Dissents
- SEC staff guidance: Certain USD-backed stablecoins (‘covered’) not deemed securities
- Criteria: 1:1 peg/redeemability, low-risk liquid backing; mint/redeem needs no SEC regulation
- Commissioner Crenshaw dissents, citing legal flaws, understated risks, few qualifiers
The U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance has issued a new guidance on stablecoins Friday, providing clarity while the Congress is still drafting the broader crypto legislations.
The guidance introduces the term “covered stablecoins,” defining a specific category deemed not to be securities under federal law.
Defining ‘Covered Stablecoins’ & Legal Implications
According to the SEC staff guidance, “covered stablecoins” meet three criteria: they maintain a one-to-one value with the U.S. dollar, are redeemable for USD on demand at par, and are backed by low-risk, highly liquid assets.
Crucially, the guidance determines that these specific stablecoins do not qualify as securities. This means activities related to minting and redeeming “covered stablecoins” likely do not require SEC registration. The determination references legal precedents like Reves …
The post SEC Guidance: Certain USD Stablecoins Deemed Not Securities, Crenshaw Dissents appeared first on Coin Edition.
Read More
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