Wintermute has approached the U.S. Securities and Exchange Commission (SEC) with a request to clarify that network tokens should not be seen as securities, in order to maintain their liquidity and support the growth of crypto markets.
Wintermute's Statement on Network Tokens
Wintermute, in its formal feedback to the SEC's request for comments, stressed that clear guidance on the status of tokens is necessary to avoid misapplication of securities laws and support the development of crypto markets.
The company stated that 'network tokens', which are 'intrinsically connected to the functioning of a decentralized network or protocol', are essential technical inputs for blockchain networks. Therefore, they fundamentally differ from financial products or securities.
Potential Consequences of Securities Classification
If network tokens were classified as securities, every trade of such digital assets in the U.S. might require compliance with securities laws. This could impact the liquidity of the tokens, raise costs for traders, and ultimately move activities offshore.
Wintermute noted, 'Such misclassification risks stifling innovation and driving blockchain development and trading activity outside of U.S. markets.'
Support for DeFi Growth Alongside Centralized Markets
In addition to clarifying the issue of network tokens, the company urged the SEC to ensure that decentralized finance (DeFi) can thrive alongside centralized markets for tokenized securities.
Wintermute stated that the agency should empower both avenues to compete, which would foster innovation, enhance investor options, and establish a global marketplace for tokenized securities.
Wintermute's appeal to the SEC highlights the need for clarity in the regulation of network tokens and support for decentralized finance, potentially contributing to the growth of crypto markets in the U.S.
