This new regulatory guideline aims to enhance protection of digital asset traders’ interest
The Securities and Exchange Commission Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of crypto.
The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange.
In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. Nevertheless, the SEC did not provide any specific reason for the ban.
Essentially, the notification prescribes that digital asset exchanges set their listing rules and prohibits the exchanges from providing services related to utility tokens or cryptocurrencies that have any of the following characteristics:
- Meme token: having no clear objective or substance or underlying, and whose price running on social media trends;
- Fan token: tokenized by the fame of influencers;
- Non-fungible token (NFT): a digital creation to declare ownership or grant of right in an object or specific right. It is unique and not interchangeable with digital tokens of the same category and type at the equal amount;
- Digital tokens which are utilized in a blockchain transaction and issued by digital asset exchanges or related persons.
We’ve reported that NFT market crashed after significant increase in May.