Why centralized exchanges refuse to list legacy crypto tokens without explicit SEC immunity
Vault12 has criticized the SEC's proposed 'safe harbor' regulation, arguing it fails to provide enough legal certainty for centralized exchanges to list legacy crypto tokens. Despite meeting all regulatory requirements, the firm's VGT token remains unlisted due to fears that the SEC could retroactively challenge its status as an investment contract.
Why it matters
This highlights a significant regulatory bottleneck in the crypto industry where lack of clear SEC guidance prevents mature projects from accessing liquidity on major exchanges.
Crypto wallet backup firm Vault12, backed by Winklevoss Capital and Naval Ravikant, warned that the SEC’s proposed token safe harbor could leave exchanges unwilling to list tokens because of the risk of a later regulatory challenge.
The safe harbor is part of the SEC’s Regulation Crypto Assets proposal , issued in August to establish conditions under which a token would no longer be subject to its original investment contract.
Vault 12 raised $17.45 million from 38 investors through agreements for future tokens in 2018 and detailed how Vault Guardian Token (VGT) has never traded on a centralized exchange, it said in in a comment letter on Tuesday .
The letter presents questions about the SEC’s proposed path for older crypto projects to move their tokens out of securities treatment.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in