SEC staff calls Canton Coin a digital commodity in no-action letter

What happened

The US Securities and Exchange Commission's Division of Corporation Finance has issued a no-action letter stating that it views Canton Coin (CC), the native token of the Canton Network, as a digital commodity. The letter, dated November 3, was reported by Crypto.news and Cointelegraph.

In the letter, staff said it would not recommend an enforcement action over the token's programmatic issuance without securities registration, as long as the network follows the conditions laid out in Canton's request. The relief applies to tokens minted programmatically by Super Validators, Validators and application providers under the submitted arrangements.

The division based its view on how CC functions within the network and where its value comes from. According to Crypto.news, the response, signed by Deputy Chief Counsel Jonathan Ingram, described the token as intrinsically linked to and deriving its value from the programmatic operation of the Canton Network. Staff also accepted Canton's representation that the network has no central party under the SEC's March interpretation of crypto assets.

The letter followed an October 30 submission from Canton's legal representatives seeking clarity on the token's treatment. Cointelegraph reported that Canton developer Digital Asset told the SEC in a Friday letter that network participants earn CC by running infrastructure and applications, with the protocol setting how many tokens they can mint based on their activity.

Why it matters

The relief gives Canton a specific enforcement assurance tied to the facts it presented, rather than a general ruling on the token's legal status. Both outlets noted that the SEC's response reflects staff's position and is not a binding decision on whether CC is a security.

The letter also illustrates how the SEC's framework for network tokens is being applied in practice. Crypto.news reported that the division cited supply and demand dynamics and representations that holders do not depend on profits from the essential managerial efforts of others. The relief was framed as a decision not to recommend enforcement under Section 5 of the Securities Act or Section 12(g) of the Exchange Act.

Andreessen Horowitz partner Miles Jennings welcomed the move on X, writing that Canton had received no-action relief for its network token and arguing that the March token taxonomy and later FAQs had created a clearer pathway for such tokens, according to Crypto.news.

What the data shows

Cointelegraph reported that CC traded at $0.098 at 10:27 am UTC on Wednesday, up 4% on the day but still down about 4.2% over the previous week, citing CoinMarketCap. Crypto.news reported that Digital Asset raised $355 million in June in a round led by a16z crypto, with participation from Citadel Securities, HSBC, BNP Paribas and Coinbase Ventures. It also noted that Bitwise launched a Canton exchange-traded product on Deutsche Börse Xetra in May under the ticker BWCC, tracking the token via Kaiko's reference rate with an annual expense ratio of 0.85%.

Background

The Canton letter arrived a day after the SEC's Division of Corporation Finance updated its crypto asset FAQs on November 2, adding questions on how network functionality, governance and centralized control affect digital commodity classification. The March 17 interpretation had already set out categories including digital commodities, collectibles, digital tools, stablecoins and digital securities, and said such tokens are not themselves securities even though the way they are offered and sold can still fall under securities laws.

SEC staff has issued similar token-related no-action letters before, including to DoubleZero (2Z) in September 2025 and to Fuse, a Solana-native DePIN project, in November 2025, Cointelegraph reported.

Canton Network, developed by Digital Asset, provides privacy-focused blockchain infrastructure for financial institutions to tokenize assets, trade and settle across platforms. Crypto.news reported that the Depository Trust & Clearing Corporation launched a tokenization service on October 28 that initially integrates Canton Network and its private Besu blockchain, and that Swiss lender AMINA began offering Canton Coin custody and trading in May as a FINMA-regulated bank.

What is still unclear

The letter does not grant blanket approval for every transaction involving Canton Coin. Crypto.news reported that the division expressly limited its position to enforcement recommendations based on Canton's representations and that different operating conditions could lead it to reconsider its treatment. Because the response reflects staff's view rather than a binding ruling, the token's legal status has not been settled by a court or the full Commission.

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