The U.S. Securities and Exchange Commission’s Division of Corporation Finance said in a no-action letter dated November 3 that it views Canton Coin (CC), the native token of the Canton Network, as a “digital commodity.” The letter, signed by Deputy Chief Counsel Jonathan Ingram, also states that staff will not recommend enforcement action if Super Validators, Validators, and application providers mint CC programmatically in the manner described, without registering under Section 5 of the Securities Act or Section 12(g) of the Exchange Act.
Yuval Rooz, CEO of Canton developer Digital Asset, wrote on LinkedIn that the relief recognized Canton Coin as a digital commodity rather than a security. The staff letter says staff reached its view in reliance on the representations Digital Asset supplied, that different facts or conditions might require different conclusions, and that the response states the division’s position on enforcement only, without expressing a legal conclusion on the issues presented.
Digital Asset Requested Two Confirmations on October 30
Digital Asset Holdings made its request in an October 30 letter from counsel Jeffrey T. Dinwoodie. The letter asked staff to confirm that Canton Coin is a digital commodity under the Commission’s March 2026 crypto assets interpretation and “therefore is not itself a ‘security,’” and to confirm that staff would not recommend enforcement over programmatic minting. The staff response confirms the digital commodity view but does not repeat the “not itself a security” wording.
Under the interpretation the SEC issued on March 17, which the CFTC joined, digital commodities are not themselves securities, although a digital commodity can still be sold as part of an investment contract. That release introduced the five-category token taxonomy, which designated 16 assets as digital commodities.
Staff Relied on Representations About Value and the Absence of a Central Party
The response names two representations staff particularly noted. The first is that Canton Coin derives its value from the programmatic operation of the Canton Network and from supply and demand rather than from the managerial efforts of others. The second is that the network has no “central party,” which the interpretation defines as a person, entity, or group that has operational, economic, or voting control over a crypto system.
Digital Asset’s request letter sets out the governance behind the second claim. As of September 30, the Global Synchronizer had about 60 Super Validators, but only 13 Super Validator Node Operators vote on governance, each with one vote. Protocol changes, including changes to minting parameters, need approval from at least two-thirds of those operators. Digital Asset runs two of the 13 nodes and states that it cannot unilaterally dictate consensus outcomes. The Canton Foundation, which hosts governance discussions, is co-chaired by DTCC and Euroclear, and Digital Asset holds one of its 22 board seats.
The letter also states that Canton Coin had no initial coin offering, pre-mine, or pre-launch sale, that tokens have been minted since the network launched in June 2024, and that network fees, which are denominated in U.S. dollars, are paid by burning CC.
November 2 FAQs Addressed Governance and Central Control
The letter arrived one day after Corporation Finance added Questions 1.4 to 1.6 to its crypto asset FAQs. Question 1.4 addresses whether participants in a functional crypto system’s broad-based governance system count as a central party under the interpretation, which is the test staff applied to Canton’s governance structure.
DoubleZero and Fuse Received Token Letters in 2025
Canton is not the first token to receive relief from the division. Staff issued a no-action letter to DoubleZero in September 2025 covering programmatic transfers of its 2Z token, and a letter to Fuse Crypto Limited in November 2025 covering offers and sales of its tokens. Both of those letters, like Canton’s, tie the relief to the facts each applicant described.
Grayscale’s Canton ETF Filing Disclosed 89% Wallet Concentration
The letter follows Grayscale’s June 5 S-1 filing for a spot Canton ETF. That filing stated that the largest 100 CC wallets held approximately 89% of the CC in circulation and noted that a single person or entity could control several wallets. The same month, Digital Asset raised $355 million in a round led by a16z crypto.
The staff positions on Canton Coin sit inside interpretive guidance rather than statute. Congress has not passed the CLARITY Act, which would write a market structure framework into law, and Kalshi has priced a 6% chance of its passage before 2027 following this week’s congressional results.
Author: Ayanfe Fakunle
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
See Also:
What a Canton Network Super Validator Does, and Why Shinhan Wants the Role | Disruption Banking
HSBC Announces Successful Tokenised Deposit Pilot on the Canton Network | Disruption Banking