The US Securities and Exchange Commission has allowed another company to sell its domestic tokens in the country
The US SEC released a “no-action letter” yesterday allowing IMVU, a digital avatar company, to sell its native cryptocurrency. According to the SEC release, IMVU can sell its VCOIN digital currencies in the United States. However, the company will do so with severe restrictions.
The commission added that VCOIN is not a security. Therefore, IMVU can offer traders and investors the sale of VCOIN without registration in accordance with Section 5 of the Securities Act. In addition, the IMVU can continue its activities without registering its digital currency as a category of equity securities under Section 12 (g) of the Stock Exchange Act.
IMVU has been asked to adhere to certain conditions if VCOIN is to continue to be sold in the US. The letter states that IMVU will not be allowed to use the proceeds from the sale of its cryptocurrency to fund the network upgrade. The network must be fully developed, functional and operational at launch and before IMVU sells VCOIN tokens.
Some of the other conditions listed by the SEC include: Buyers must agree to purchase the VCOIN tokens in order to use them and not speculate on their prices. The VCOIN tokens can only be sold at a fixed price. Users must adhere to various restrictions on knowledge of your customer and anti-money laundering. IMVU is prohibited from promoting or endorsing the listing or trading of VCOIN on any third party trading platform. The crypto company will produce enough VCOIN to ensure that the token’s fixed price is adhered to. and IMVU will set specific restrictions on VCOIN purchases, conversions and transfers.
The terms listed by the SEC are in line with some of the terms proposed by the IMVU in its request for a non-action letter. The crypto firm’s attorney, Michael Didiuk, a partner at law firm Perkins Coie, mentioned in the proposal that IMVU would not allow users to convert VCOIN to fiat currency on their platform. There is a 10-15% fee for converting coins into fiat currencies on other platforms.
The SEC has issued few letters of non-compliance in the past, including to firms like TurnKey Jet and Pocketful of Quarters. IMVU is still relatively unknown in the field of cryptocurrency. The company registered a trademark for VCOIN in August last year. According to the filing, the trademark applies to downloadable virtual goods that use blockchain technology to execute and record transactions.