Crypto Ratings Council Assesses Which Coins May Have Characteristics of a Security
The Crypto Rating Council (CRC) is assessing which cryptocurrencies have characteristics that could be consistent with treatment as a security under U.S. law.
The CRC is a self-governing body that relies on federal law, statements from staff members of the U.S. Securities and Exchange Commission (SEC) and the Howey test to come up with a score that indicates the potential of a crypto asset to fall under federal securities laws.
Under the Howey framework, a transaction represents an “investment contract” if a person “invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter, sponsor or other third party.”
CRC assigns a score of one to five. A score of one suggests the token has few or no attributes that make it a security whereas a score of five indicates that the coin has attributes that may make it a security.
Getting the highest rating is XRP, with a CRC score of 4. CRC mentions that “tokens were reportedly sold privately to venture and crypto-affiliated investors.”
A list of cryptocurrencies are a step below XRP in the rankings, with a score of 3.75, including Tezos (XTZ), Stellar Lumens (XLM), Loom Network (LOOM), Liverpeer (LPT), Hedera Hashgraph (HBAR), FOAM (FOAM), Decentraland (MANA), Cosmos (ATOM), Augur (REP) and EOS.
The CRC says its work is not endorsed by any asset development team or foundation, any regulator, or any other third party, and does not reflect a legal conclusion or indicate the value of a given crypto asset.
You can check out the entire rankings here.
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