US Securities and Exchange Commission (SEC) allowed another company to sell its native tokens in the country
The US SEC published a „no-action letter“ yesterday, allowing IMVU, a digital avatar company, to sell its native cryptomeda. According to the SEC publication, IMVU can sell its VCOIN digital coins in the United States. However, the company will do so under severe restrictions.
The commission added that VCOIN is not a title. As such, IMVU may offer to sell VCOIN to dealers and investors without registration under Section 5 of the Securities Act. In addition, IMVU may continue its activities without registering its digital currency as a class of securities under Section 12(g) of the Foreign Exchange Act.
IMVU was required to meet certain conditions if it wanted to continue selling VCOIN in the United States. The letter stated that IMVU is not permitted to use the proceeds from the sale of its cryptomeda to finance the upgrade of the network. The network must be fully developed, functional and operational after its launch and before IMVU sells any VCOIN tokens.
Some of the other conditions listed by SEC include that buyers must agree to purchase VCOIN tokens to use them and not speculate on their prices; VCOIN tokens can only be sold for a fixed price; users must comply with various anti-money laundering and KNY (Know Your Customer) restrictions; The IMVU is prohibited from promoting or supporting VCOIN listing or trading on any third party trading platform; the cryptomoeda company will produce enough VCOIN to ensure that the fixed price of the token is maintained; and the IMVU will set specific limits for purchases, conversions and transfers of VCOIN.
The conditions listed by the SEC are in accordance with some of the terms proposed by the IMVU in its no-action letter request. Attorney Michael Didiuk, a partner at the law firm Perkins Coie, mentioned in the proposal that IMVU would not allow users to convert VCOIN into fiduciary currency on its platform. Converting currencies into fiduciary currencies on other platforms would attract a rate of 10-15%.
The SEC has issued only a few no-action letters in the past, including for companies such as TurnKey Jet and Pocketful of Quarters. IMVU is still relatively unknown in the cryptomime space. The company registered a trademark for VCOIN in August last year. According to the application, the trademark will be applied to downloadable virtual goods that use blockchain technology to execute and register transactions.