Vault12 urges SEC to tighten crypto safe harbor as exchange listing risk persists
A proposed U.S. regulatory framework for crypto tokens is drawing scrutiny from older projects that still cannot secure exchange listings. Vault12 says its VGT token has remained off centralized exchanges since its 2018 fundraising despite meeting or abandoning all white paper commitments, underscoring what it sees as a gap in the SEC's safe harbor proposal.
Highlights
- Vault12 asserts the SEC's proposed safe harbor under Regulation Crypto Assets leaves exchanges exposed to later regulatory challenges on token status.
- Vault12, backed by Winklevoss Capital and Naval Ravikant, raised $17.45 million from 38 investors via future token agreements in 2018, aiming for retroactive compliance.
- Exchanges remain reluctant to list Vault Guardian Token as the SEC could still question whether safe harbor conditions were fully met under the current proposal.
Safe harbor dispute centers on listing certainty
As reported by CoinDesk, Vault12 says the U.S. Securities and Exchange Commission's proposed safe harbor under Regulation Crypto Assets still leaves exchanges exposed to the risk that a token's status could later be challenged. The company says that uncertainty is preventing centralized platforms from listing Vault Guardian Token, or VGT.Vault12, a crypto wallet backup firm backed by Winklevoss Capital and Naval Ravikant, raised $17.45 million from 38 investors through agreements for future tokens in 2018. In a comment letter filed Tuesday, it says that sale fits the SEC's proposed transition path for older crypto projects almost exactly because it has either fulfilled or formally dropped every commitment in its white paper.
The SEC's August proposal would create exemptions for token fundraising and a conditional safe harbor for ending an investment contract associated with a token. Issuers would need to complete or permanently stop promised essential managerial efforts, make no new such commitments and have no intention of doing so, then file a transition report, known as Form TR, explaining that conclusion.
Vault12 says exchanges it approached kept asking the same question, whether the SEC could later decide that VGT remained subject to the original investment contract. Under the current proposal, the agency could still challenge whether an issuer actually met the safe harbor conditions, and if a certification proved inaccurate, securities-law requirements could continue to apply.
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