On Thursday November 19, the U.S. Securities and Exchange Commission, issued an unusual no-action letter to a blockchain platform. It was in response to a request that the company had over issuing a digital asset. The letter was from the Securities and Exchange Commission's Division of Corporation Finance. It stated that the agency wouldn't recommend any enforcement actions against the social platform IMVU. The platform issued a VCOIN digital asset. The Division of Corporation Finance will allow he firm's token to keep operating without registering as a security.
In the past, crypto firms that issued their own tokens had to follow the regulations of the U.S. Securities and Exchange Commission before issuing the token. Being classified as a security depends on a third party getting a profit. IMVU will have to stop its coin from looking like it is an investment.
In the letter, the U.S. Securities and Exchange Commission stated that IMVU would still have to follow regulations around anti-money laundering. It will still have limits on VCOIN purchases, transfers and conversions. IMVU will have to make the token continuously available in any quantity at a fixed rate. It also can't encourage trading on any third-party platform. Finally, IMVU can't use proceeds from sales to upgrade the network before it lists the coins.
The U.S. Securities and Exchange Commission won't fine IMVU for issuing VCOINs for their intended purpose. Users can earn, buy or trade the tokens for fiat. The letter is just an opinion of the U.S. Securities and Exchange Commission. It's not a legal document. The U.S. Securities and Exchange Commission issued a similar letter to a jet manufacturer a few months ago. Because the U.S. Securities and Exchange Commission's letter said that the tokens can't be traded on a third-party platform, users will have to send them into a private wallet. IMVU will buy them back for a 10% fee. VCOIN is not intended to be an asset like Bitcoin. Its numbers will grow, and its price will be fixed. According to IMVU, it will start to sell the VCOINs in January 2021 to its customers.