Key facts
- SEC staff said they will not recommend enforcement if Canton's validators and application providers mint the token programmatically without registering it.
- Staff cited Canton's representation that the token derives value from the network's programmatic operation and supply and demand, not managerial efforts of others.
- Staff also cited Canton's representation that the network has no central party.
- Canton said the letter is the first relief of its kind since the SEC's March interpretive release and its August Regulation Crypto Assets proposal.
- The SEC noted the letter reflects only staff's enforcement position, not a legal conclusion, and rests on the facts Canton presented.
- Digital Asset, which created the Canton Network, raised $355 million earlier this year from Wall Street firms and a sovereign wealth fund.
SEC Division of Corporation Finance staff said in a letter dated November 3, 2026 that they view Canton Coin, the native token of the Canton Network, as a "digital commodity" under the agency's March interpretation of how securities laws apply to crypto. Staff also said they would not recommend enforcement action if Canton's validators and application providers mint the token programmatically without registering it.
The relief comes a week after the Depository Trust & Clearing Corp. launched a tokenization service that runs on Canton and DTCC's own private network, letting firms convert DTC-held stocks and Treasuries into tokens. Morgan Stanley said on November 3, 2026 that it was among the first banks to use the service.
SEC staff pointed to two representations from Canton's lawyers: that the token derives its value from the network's programmatic operation and from supply and demand rather than from the managerial efforts of others, and that the network has no "central party." Canton Coin launched without an initial coin offering or premine, and tokens were initially earned only by running network infrastructure and applications, according to a statement from Canton. Canton's request letter was dated October 30, four days before staff responded.
The SEC noted the letter has limits: it reflects only staff's position on enforcement, not a legal conclusion, and rests on the facts Canton presented. "Financial institutions need confidence in both the technology they use and the economic model that supports it," said Yuval Rooz, CEO of Digital Asset, which created the Canton Network.
Canton said the letter is the first relief of its kind since the SEC published its March interpretive release, which found that most crypto assets are not securities, and since the agency's August Regulation Crypto Assets proposal. The decision fits a broader shift since the Clarity Act stalled in the Senate in September, with the SEC and CFTC taking the lead on crypto rules. SEC Chair Paul Atkins said in July the agency was ready to act if Congress did not, and the SEC recently proposed rules on how advisers and funds hold crypto. Digital Asset raised $355 million earlier this year from Wall Street firms and a sovereign wealth fund.