The American Securities and Exchange Commission (SEC) is probably one of the world’s best-known supervisory authorities for stock exchange transactions. Its main task is to control transactions with securities. No matter whether Ripple, EOS or Telegram: they all have already dealt with the SEC. However, acquaintance with the supervisory authority is often less pleasant for the companies. In our case today, however, the topic of Ethereum tokens is at stake and there is exciting news in this respect!
Ethereum Token for funds? – SEC gives green light
The positive news from the SEC reached the American asset management company Arca at the beginning of the week. Accordingly, the company is an asset manager which – similar to Grayscale – provides products in the area of cryptocurrencies and blockchain for institutional investors.
But what exactly is it all about? – Arca filed an application with the American SEC. The application was to issue shares in a product via Ethereum tokens instead of classic share certificates. The application has now been approved by the SEC and Arca is probably the first company that has the official seal of the SEC to sell digital shares via Ethereum Token.
ERC-1404 as token standard
The company uses ArCoins based on the Ethereum blockchain. These are not ERC-20 tokens. Rather, the token standard ERC-1404 is used for this. This token differs massively from common ERC-20 tokens, because it has to conform to the requirements of the regulators. This has the following practical consequences:
With the ERC-1404 standard transactions can be rejected. Accounts can be frozen and transactions can only be classified as legitimate if they are sent to predefined addresses.
We can therefore state that the SEC is therefore creating a novelty in history. Ethereum tokens can now be used to buy digital shares that are in no way inferior to traditional shares from a legal perspective.