In what appears to be an apparent first, the United States Securities and Exchanges Commission (SEC) has given its approval to a crypto project seeking exemption from any enforcement action by the regulators during its token sale.
The SEC’s Division of Corporation Finance wrote in a letter dated April 3 that based on facts presented by TurnKey Jet in an earlier request the regulators will not “recommend enforcement action to the Commission” since the tokens in question are not securities.
Precisely, the regulatory approval notes that Florida-based TurnKey Jets (TKJ) tokens will continue to be regarded as non-securities if the project abides by some terms they defined in their request namely:
Not using any proceeds from the token sale to develop any section of their proposed platform.
At the time of the token sale, users will instantly be able to use the tokens to purchase air charter services offered by TurnKey Jet
Transfers of the proposed tokens will only be the other TKJ wallets and not to other external wallets.
The token will have a value of 1TKJ to 1USD for its lifetime and will always obligate TurnKey Jet to offer air charter services at that rate.
If TurnKey Jet decides to repurchase the tokens from the public, it would be at a discount to the 1USD per token unless the company obtains a court order permitting the liquidation of the token.
The token will be sold in a manner that emphasizes its utility and not any potential increase in value.
As we noted earlier, this will be the first time that the SEC’s Division of Corporation Finance is approving a startup’s request for exemption from enforcement action for its token sale. In the past, the U.S SEC has enforced several actions against ICOs and other entities for breaching securities law.
More recently, we reported that the SEC posted a job listing for an incoming employee who could create “a comprehensive plan to address crypto and digital asset securities.”
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