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Litecoin Confirmed It’s Not A Security Say Charlie Lee And Crypto Rating Council

· in Breaking, Crypto News
Carlos is an international relations' analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.

Litecoin is not a security. This is according to the Crypto Rating Council, an organization that assists crypto-related companies understand whether they comply with current U.S. federal securities laws. 

Litecoin Is Not A Security

The cryptocurrency market is moving towards better regulating the space. The most recent initiative is called the Crypto Rating Council and it will be helping companies understand whether specific cryptocurrencies are considered securities or not. 

The founding members of the initiative include Anchorage, Bittrex, Circle, Coinbase, DRW Cumberland, Genesis, Grayscale Investments and Kraken. 

These companies decided to work on this initiative considering that the proper legal characterization of a crypto token can have a meaningful impact on how a business operates. For example, if a token is a security under U.S. federal securities laws, it will impact registration licensing and operating obligations of the firm. 

About it, the official press release informed:

“Although the U.S. Securities and Exchange Commission has issued helpful guidance, whether any given crypto asset is a security ultimately requires fact-intensive analysis by knowledgeable technical and securities law experts.” 

The current challenges faced by the industry prompted Coinbase to bring industry leaders to create a scalable, points-based rating system that will provide clarity about different cryptocurrencies in the space. 

The rating works with a score that ranges between 1 and 5. A score of 1 means that the Council’s analysis suggests the asset has few or no characteristics consistent with traditional regulated securities. This is the case of Litecoin, Bitcoin (BTC), Monero (XMR) and Dai. 

At the same time, a score of 5 means that the Council considers a specific asset has many characteristics consistent with a security. 

Charlie Lee, the creator of Litecoin, commented on Twitter that although it has been clear to most analysts that Litecoin is not a security, is good to see the Crypto Rating Council agree on the matter. 

The cryptocurrencies that have high chances of being considered a security include Maker (MKR), Polymath (POLY) and XRP. 

It is worth mentioning that the ratings can change over time. The Council is also open to receiving feedback from asset issuers when they want to share additional information or clarifications regarding specific digital currencies. 

Other cryptocurrencies included in the report include EOS, Decentraland (MANA), Augur (REP), Stellar (XLM), Loom Network (LOOM), FOAM, Tezos (XTZ), Algorand (ALGO), Chainlink (LINK), Ethereum (ETH), Numeraire (NMR) and Zcash (ZEC). 

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