- Bitcoin alongside Litecoin, Monero, and Dai score one indicating unlikeness of being securities.
- The Crypto Rating Council hopes that the SEC views this as a good step forward.
Cryptocurrency exchanges Coinbase, Kraken, Circle which operates Poloniex and Bittrex have come up with a system that lets them rate cryptocurrencies that are likely to be flagged as securities. A press release regarding the system sent by Coinbase to The Block said that the system is tailor-made to assist exchange platforms to know which digital assets to list those to stay away from.
The system is run via a Crypto Rating Council and requires that all the collaborating exchanges post online ratings for cryptos using a scale of one to five. The highest value of the scale flags the crypto token as a security. While the system does not allow input from the token issuers, it allows them to “dispute a score their token received.”
A section of Coinbase’s press release explains that:
“Any asset rating published by the Council is the result of a factual analysis performed by outside legal experts in conjunction with technical experts at member firms.”
In already existing scores, Bitcoin scored one. Ripple (XRP) had a score of four while EOS, Stellar and Tezos made a score of 3.75. Other cryptocurrencies in the same level as Bitcoin include Monero, Litecoin, and Dai.
Mary Beth Buchanan, who is the current general counsel at Kraken said:
“It’s our hope the SEC [the U.S. Securities and Exchange Commission] will view this as a positive step.” She added that the CRC “It “does show the SEC what each exchange is doing to come to a decision.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.