Twelve-year-old George Weiksner may hold the title of youngest CEO in the United States. When Weiksner was 11, he and his dad, Michael, co-founded Pocketful of Quarters (PoQ), a cryptocurrency exchange for video game players. Their objective: Build a universal video game currency so that gaming junkies don’t lose the coins they’ve accumulated when they quit playing a particular game.
It makes for a cute story, but the father-son duo isn’t messing around. In July, PoQ received a no-action letter from the Securities and Exchange Commission effectively greenlighting their plan to sell digital tokens, known as Quarters, without registering them as securities. The no-action letter indicates that SEC won’t pursue enforcement action against PoQ, making it the second crypto platform to receive that treatment this year. TurnKey Jet obtained a no-action letter from the agency in April in response to the air charter company’s plan to sell its tokens without registering them.
PoQ’s no-action letter doesn’t break any new ground, given the similarities between its tokens and those of TurnKey Jet. Both will be sold at a fixed price. Additionally, both are intended specifically for use within their own platforms; that is, users can’t transfer TurnKey and PoQ tokens to outside wallets. Owners of Quarters can use the tokens immediately for online gaming once they are a sold, as is the case with TurnKey’s digital coins for air charter services.
Based on the framework outlined by the SEC around the time it issued the no-action letter to TurnKey, it was fairly clear that PoQ’s token would fall outside the agency’s definition of a “security.” As some have pointed out, though, together with other decisions the SEC has made in recent months, the PoQ no-action letter is a further indication that the fog shrouding its position on cryptocurrencies seems to be lifting.
That would be welcome news to one important figure who appears wary of the uncertainty around crypto. Outspoken SEC commissioner Hester Peirce has made candid public remarks about the agency’s need to develop a plan of action for regulating bitcoin and the like. Lately, Peirce has even started talking about opportunities for U.S. authorities to engage in cooperative efforts with foreign counterparts to regulate digital coins. In light of the amount of crypto activity going on abroad, “we have to think about our regulation with a sensitivity for cross-border considerations,” she said in a speech last month in Singapore.
For now, though, the SEC still has work to do at home when it comes to regulating the crypto sector.