SEC staff say they view Canton Coin as a “digital commodity” and will not recommend enforcement over how it is minted, giving the public chain under DTCC’s new tokenization service a cleaner footing with Wall Street banks.
MoneyTurkey Crypto Desk | 4 November 2026
Key points
- The SEC’s Division of Corporation Finance said in a no-action letter dated Nov. 3 that it views Canton Coin, the Canton Network’s native token, as a “digital commodity” under the agency’s March interpretation of how securities law applies to crypto.
- Staff will not recommend enforcement if Super Validators, Validators and application providers mint the token programmatically without registering it under Section 5 of the Securities Act or Section 12(g) of the Exchange Act.
- The letter lands a week after DTCC launched a tokenization service that runs partly on Canton. Morgan Stanley said Tuesday it is among the first banks to use it.
The public blockchain under Wall Street’s newest tokenization service now has a regulatory answer on its own token. The bigger point is for the banks testing DTCC’s service: the network they are building on no longer carries an open securities-registration question over how its native token is created.
What the SEC said
Staff relied on two representations from Canton’s counsel. First, the token is tied to and derives its value from the programmatic operation of the network and from supply and demand, not from the managerial efforts of others. Second, the network has no “central party” as the SEC’s interpretation defines it. Canton Coin launched without an initial coin offering or premine, and tokens were first earned only by running network infrastructure and applications, according to Canton.
Canton’s lawyers filed the request on Oct. 30. Staff replied four days later, in a letter signed by Deputy Chief Counsel Jonathan Ingram.
The limits
The letter states only the division’s position on enforcement and “does not express any legal conclusion,” the SEC said. It rests on the facts Canton presented, and “any different facts or conditions might require the Division to reach different conclusions.” Canton’s own release goes further, describing the token as “a digital commodity and not a security”; the staff letter itself does not make that legal finding.
Canton said this is the first relief of its kind since the SEC’s March interpretive release, which found most crypto assets are not securities, and since the agency’s August Regulation Crypto Assets proposal.
Why it matters
DTCC’s service lets firms turn DTC-held stocks and Treasuries into tokens on Canton and on DTCC’s own private network. Digital Asset, which built Canton, raised $355 million earlier this year from Wall Street firms and a sovereign wealth fund. “Financial institutions need confidence in both the technology they use and the economic model that supports it,” Digital Asset CEO Yuval Rooz said.
The letter also shows how US crypto rules are being made. With the Clarity Act stalled in the Senate since September, the SEC and CFTC are setting policy through interpretations and staff letters. SEC Chair Paul Atkins said in July the agency was ready to act if Congress did not, and the SEC has since proposed rules on how advisers and funds hold crypto. Staff positions are tied to specific facts and are not binding on the Commission, so this is firmer footing for Canton, not a permanent one.
What to watch
- Whether other networks seek similar no-action relief for their native tokens
- More banks joining DTCC’s Canton-based tokenization service
- Further SEC or CFTC guidance on digital commodities
Related on MoneyTurkey
- South Korea Probes Banks on Crypto-Hack Fallout
- Amazon, Tesla, SpaceX Object to OKX-ICE Tokenized Stock Venue
For information only. Not investment advice.
Sources
- SEC Division of Corporation Finance, Canton Coin no-action letter (Nov. 3, 2026): sec.gov
- Canton Network press release (Nov. 4, 2026): canton.network
- Decrypt: decrypt.co
- The Block: theblock.co
