The US Securities and Exchange Commission (SEC) has just removed its first formal definition of digital assets from its hedge fund rulebook.
In the original version of the document, the regulator referred to these as "assets that are issued and transferred using distributed ledger or blockchain technology, including so-called "virtual currencies," "coins" and "tokens."
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The regulator has explained:
"We proposed adding ‘digital assets’ as a new term to the Form PF Glossary of Terms. The Commission and staff are continuing to consider this term and are not adopting ‘digital assets’ as part of this rule at this time."
However, this clause is absent from the approved rules. The footnote says the regulator is still working on a definition and has already proposed adding it to the Form PF Glossary of Common Terms.
SEC chief Gary Gensler stated in September last year that cryptocurrencies that suggested the possibility of staking could fall under the definition of securities based on the Howey test.