- The US regulator admits that the token is not a security.
- The company must adhere to tough restrictions.
The US Securities and Exchange Commission (SEC) allowed a US business travel company TurnKey to sell tokens, but imposed severe restrictions for the issuance.
Cryptocurrency experts believe that this U-turn in approach to digital assets might signal that the regulator might soften its stance on tokens.
In an accompanied letter, the SEC confirmed that TurnKey’s token was not a security and outlined conditions under which the permission had been granted.
“TKJ will restrict transfers of Tokens to TKJ Wallets only, and not to wallets external to the Platform,” the SEC wrote.
It means that the tokens must be non transferable, which is a hard thing to do on existing blockchain platforms. However, TurnKey described its blockchain program as “centralized” and “permissioned”, meaning that TKJ Tokens will be deployed within a private and centralized blockchain, operated by TurnKey.
“The proposed TKJ Tokens will operate and be deployed on the Platform and Network consisting of a private, permissioned, centralized blockchain network and smart contract infrastructure operated by TKJ. TKJ will run the Platform and Network and use third-party service providers, as necessary, to meet operational requirements, including providers of internal tools for developers, user-facing app interfaces, wallets, smart contract infrastructure and private network and token management services.”
As a result, TKJ Tokens won’t be tradable on cryptocurrency exchanges, but only used within the company to reduce the difficulties of sending and receiving international payments for flights.
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