SEC staff calls Canton Coin a digital commodity, and BlackRock sees no election impact on crypto plans
SEC staff says Canton Coin is a digital commodity, not a security
Staff at the U.S. Securities and Exchange Commission (SEC) said on Tuesday that they view Canton Coin, the native token of the Canton Network blockchain, as a "digital commodity" rather than a security. The statement came in a no-action letter, which is a written note from SEC staff saying they would not recommend enforcement action under a specific set of facts.
The letter was based on facts presented by the project's lawyers and applies as long as Canton Coin keeps being created and distributed through the network's automated processes without securities registration. That covers tokens earned by validators and application providers who help run the blockchain.
Key points from Tuesday's coverage
- SEC's Division of Corporation Finance published the no-action letter on Tuesday.
- Staff pointed to Canton's lack of a central party and the token's role in running the network, rather than an expectation of profit from a company's efforts.
- Canton Network is designed to let financial institutions move and manage assets on blockchain infrastructure.
- Canton Coin held a gain of roughly 2% on the day and did not move substantially on the news.
- BlackRock's head of digital assets said the U.S. midterm election results are unlikely to change the firm's crypto strategy.
Why the letter pointed away from securities rules
Under U.S. rules, a token treated as a security faces much stricter requirements than one treated as a commodity. The SEC staff focused on two things: Canton has no central party controlling the network, and the token's job is to help operate the blockchain itself, not to give investors a share of profits from a company's work. The decision gives Canton some regulatory clarity as it builds services for financial institutions.
BlackRock says the midterms won't shift its crypto approach
Also on Tuesday, Robert Mitchnick, head of digital assets at BlackRock, said the midterm election results should not change the asset manager's crypto plans. Asked at the ETF Investor Forum in New York whether the vote could affect product launches or investment flows, he said, "Not really, to be honest."
He argued that bitcoin and ether already have much of the regulatory clarity firms need to offer investment products, even though broader crypto legislation remains stalled in Congress. "Bitcoin has a lot of what it needs already," he said, adding that the SEC has been proactive in working with the industry. He also said the industry must prove its economic value to avoid becoming a political football as administrations change: "The more you drive adoption, the more you drive real value-add use cases, the more it becomes a bipartisan issue." BlackRock manages roughly $75 billion across its crypto ETF products, including its iShares Bitcoin Trust.
What is confirmed and what is not
Confirmed: the SEC staff letter exists, was published Tuesday, and applies to tokens created and distributed through Canton's automated processes under the facts presented. The staff view applies to those specific facts and is not a ruling by the full commission.
Also confirmed: Mitchnick's comments were made publicly at the ETF Investor Forum in New York.
Unclear: whether the staff's view would hold under different facts, or how other regulators or courts might treat Canton Coin. The letter itself is limited to the facts the project's lawyers presented.
Why this matters for crypto
A staff-level statement from the SEC that a token is a commodity, not a security, reduces enforcement risk for that token under the described conditions. For a blockchain aimed at financial institutions, that clarity may make it easier for regulated firms to engage with the network. Mitchnick's comments add a large asset manager's view that election outcomes are not the main variable for institutional crypto products.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.