The US Security and Exchange Commission has consistently intervened into the cryptocurrency industry in this country. It would be putting things mildly to say that skepticism of anything this industry does run rather high at the SEC.
Indeed, this is why a recent SEC decision to approve the sale of Ethereum tokens for a crypto gaming startup is a bit of a surprise. This is especially true when the startup is the brainchild of a 12-year old from Connecticut. The entire story was covered by Rebecca Campbell for Decrypt and reposted on Yahoo Finance. The crypto gaming company is Pocketful of Quarters. It has been given permission by the SEC to issue tokens on the Ethereum blockchain.
Which Pocketful of Quarters Are Powered by 12-Year Old?
The tokens will not be classified as securities to gain this green light. Rather, this will be the first “no-action letter” that has been issued by SEC oversight in matters of this nature. A letter signed by Jonathan A. Ingram as the chief legal advisor for the SEC’s FinHub division paved the way. It states that (this division) “will not recommend enforcement action to the Commission.”
The SEC leaning in favor of a crypto endeavor is big
It is hard to distinguish the bigger storyline here. The SEC leaning in favor of a crypto endeavor is big. The fact that Pocketful of Quarters is spearheaded by George Weiksner, who is still making his way through middle school might be bigger.
None the less, this decision clears the way for the token sale. This goal of this gaming startup is to allow characters and various add-ons to move from game to game. The use of ERC-20 tokens called Quarters would be the means. These are stablecoins tied to the US dollar at a rate of 400 Quarter to the dollar. All of this would take place with the use of blockchain technology. The ability to move within the system is one of the basic premises of blockchain.
Not Favorable For The SEC?
There is a very logical explanation of why this project did receive a favorable response from the SEC. The tokens inside the games cannot be sold on exchanges. This eliminates the key factor of speculation. The actual earnings from the token sales cannot be used to develop the platform. Any approved account holders, developers and anyone with influence in the project face certain conditions. They will all have to be subject to KYC and AML procedures on a regular basis.
The main reason for the approval is that the token is an internal facet of the game. It is considered a utility token with no external use or influence. The measures for this project are strict and highly limited. Yet, the SEC approval is still a major accomplishment.
The simple fact that the Pocketful of Quarters’ proposal met little or no resistance from SEC oversight is huge. This has to be seen as a tangible victory for the cryptocurrency industry under any conditions. It is also a tribute to the innovative power of youth. Especially any young person out there interested in what blockchain technology can do for their budding endeavors.