HomeMarketExclusive: MyCrypto founder says SEC’s guidance is not really helpful

Exclusive: MyCrypto founder says SEC’s guidance is not really helpful

Monahan

Alexanndria Welch, a PR representative at Hokku, shared a press release last week with Crypto Insider. The document noted that the US Securities and Exchange Commission (SEC) had issued a “no-action” letter to TurnKey Jet Inc. This gave the firm the official “stamp of approval” required to conduct crypto-related business transactions.

However, some blockchain industry professionals believe that this was a “downhill move” for the digital asset ecosystem, which may not necessarily benefit from SEC’s “guidance.” Sharing her views exclusively with Crypto Insider, Taylor Monahan, the CEO of MyCrypto, a company focused on providing innovative crypto solutions (such as the Invisible Ink Paper Wallet) remarked: “A lot of people, myself included, have been eagerly awaiting the SEC’s guidance on tokens, securities, and utilities, and how it all relates to distributed ledger technologies (DLT).”

Nothing To Get Excited About

However, she clarified: “When the framework and associated no-action letters were published, people got excited. That excitement was quickly curbed as the documents provided little new information and simply reinforced the advice (responsible) lawyers have been giving to crypto companies for the last few years.”

She added: “Especially if you started reading the no-action letters, the content amounts to, ‘You don’t have to register if tokens are non-refundable, tokens can only be used for specific things, the token issuer follows (know-your-customer) KYC/ (anti-money laundering) AML requirements.

The token is fully operational at the time of sale, tokens can be immediately used, tokens can’t be transferred to someone else outside the KYC’d network of people, tokens have a steady price of $1 USD and don’t increase in value.

“This Is And Has Been Obvious”

According to Monahan’s assessment: “This is and has been obvious. However, this is not valuable for the crypto-ecosystem as no one is deploying tokens that are essentially a fancy gift card, arcade token, or loyalty program.”

In response to a question about what would have been a better approach to the first “no action letter” and SEC’s guidance in general, Monahan said: “People, especially lawyers, are looking for more clarity into the more nuanced aspects of decentralized technologies. We all understand that if we re-create a gift card on the blockchain, it’s not a security. However, it leaves a lot of questions unanswered, especially in regard to the differences between those who sell or distribute tokens, those who create marketplaces for tokens, and those who simply build products that give people the ability to see or access their tokens.”

Does SEC’s Guidance Adversely Affect Decentralized Technologies?

Elaborating on how this affects the reputation of decentralized networks, Monahan noted: “It doesn’t actually change much. We were aware, and are now even more aware, that the SEC is going to stick to the Howey Test and look into tokens and token issuers on a case-by-case basis, analyzing the ‘facts and circumstances’ of each case.”

Explaining the difference between a decentralized currency and a virtual currency, and which category TurnKey Jet falls into, Monahan said: “The word decentralized doesn’t mean that an item is necessarily digital or virtual. It simply means there is no single, central administrator that can remove it from existence, alter its form, control its issuance, etc. A truly decentralized currency is produced by, and derives its value from, the entire collective network of people using, mining, sending, and trading that currency. If a single party that was associated with a decentralized token disappeared, the token can still be used and retains its value.”

TKJ Tokens Are Like “Video Game Bucks”

Monahan further explained: “Virtual currencies, on the other hand, are things like the video game bucks you use to buy a new sword or, in this case, the ‘TKJ tokens’ you use to buy a flight. These currencies are similar to a gift card; the value of the tokens doesn’t increase in value, the tokens can only be used to buy flights with TurnKey Jet, Inc. and TurnKey Jet, Inc. is the sole provider and manager of these tokens. In these cases, the token becomes instantly worthless if TurnKey Jet, Inc. were to disappear.”

The above is to be considered opinion and not investment advice in any way, as an unbiased media, no one interferes with the Editorial content of CryptoInsider.com, writers have freedom to choose their own direction, members of Crypto Insider do not participate in trades based on content.

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Written by

I enjoy writing about all topics related to Bitcoin, Blockchain, and other cryptocurrencies. The topics that interest me most are crypto regulations, quantum resistant blockchains, Ethereum and Bitcoin Core development, and scams orchestrated under the guise of ICOs. My academic background includes an undergraduate degree in Computer Science, with a minor in Mathematics from the University of Nevada, Las Vegas. I also possess a Master of Science degree in Psychology from the University of Phoenix. I've been writing about cryptocurrencies and distributed ledger technology (DLT)-based platforms since December of 2017. To date, I have written about 800 articles - which have all been published. I have also edited about 300 articles. While completing my academic coursework, I engaged in independent study programs focused on public-key cryptography and quantum computing. My professional work experience includes working as an application developer for the University of Houston, data storage specialist at Dell EMC, and as Teacher of Mathematics in the United States, China, Kuwait, and Pakistan.