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Coinbase, Kraken and other major U.S. crypto firms have reportedly teamed up to establish Crypto Ratings Council.
Major United Statesâ crypto firms such as Coinbase and Kraken are teaming up to launch a rating system to jointly define which digital assets are securities.
Crypto Ratings Council to launch on Sept. 30
In a move to provide more clarity on which tokens can be traded without the supervision of regulators, the major U.S.-based exchanges have formed the Crypto Ratings Council, the Wall Street Journal (WSJ) reported on Sept. 30.
According to the report, other members of the Crypto Ratings Council include Circle Internet Financial, Bittrex, Genesis Global Trading, Grayscale Investments, Anchor Labs and DRW Holdings' Cumberland unit. The group continues to recruit participants, the report notes.
Digital assets ranked on a scale
Expected to officially launch on Sept. 30, the new crypto council will be publishing online ratings for digital assets on a scale of 1 to 5. The highest score means that a certain token is considered as a security that cannot be issued, sold or traded by unregulated firms.Â
As such, Bitcoin (BTC) is rated at 1, as regulators publicly said that Bitcoin is not a security, participants reportedly stated.
Brian Brooks, chief legal officer of Coinbase, who reportedly conceived the rating system, emphasized that the question whether a certain token is a security or not is âone of the biggest uncertainties around crypto and the reason why more asset managers are not comfortable with it.â
Mary Beth Buchanan, Krakenâs general counsel, expressed hope that the U.S. Securities and Exchange Commission (SEC) will view the initiative as a positive step, claiming that the council aims to show the regulator the exchangesâ efforts to come to a decision on the matter.
Blockchain Associationâs efforts
According to the WSJ, a number of companies participating in the council are members of the Blockchain Association, a lobbying group that backs a House bill that would exempt many cryptocurrencies from SEC rules. The firms reportedly briefed senior lawmakers on the matter.
On Sept. 26, SEC Commissioner Hester Peirce, who is also known as Crypto Mom in the community, expressed some frustration with the pace of the SECâs regulation, calling the regulators excessively paternalistic. Peirce said:
âIf you want a government thatâs more forward-thinking on innovation, that means that if something goes wrong, you canât go running back to the government and say âHey, you didnât protect me from myself!â [...]I think we need to be a little less paternalistic.â
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