Vault12 Warns SEC Safe Harbor Leaves Exchanges Uncertain
Vault12 says the SEC’s proposed rules around token listings still leave too much legal uncertainty. The debate also affects European exchanges and MiCA, where listing policy remains under scrutiny.
Key Takeaways
- Vault12 is warning the SEC that the proposed token safe harbor still does not give exchanges enough legal certainty.
- The company says Vault Guardian Token, VGT, has never traded on a centralized exchange, despite raising $17.45 million in 2018.
- Vault12 is proposing a 60-day objection window, after which a properly filed statement would have to be binding on the regulator.
Vault12 has warned the SEC that the proposed safe harbor for tokens exchanges still does not provide enough certainty. According to the crypto company, an exchange could later end up in a new legal dispute over a token’s status, even if the issuer believes it has met all the conditions.
VGT Stays Off the Exchange
The warning centers on Vault Guardian Token, better known as VGT. Vault12 says it raised $17.45 million (€15.6 million) in 2018 from 38 investors through agreements for future tokens, but that VGT has never traded on a centralized crypto exchange. The company says it has since fulfilled every promise in the white paper or formally dropped it.
According to Vault12, that is exactly where the problem lies. The company says exchanges that reviewed VGT kept asking the same question: how do we know the SEC won’t later say that VGT still falls under the old investment contract? That points to a broader concern in the crypto market: even if a project thinks it has moved out of the securities space, a listing on an exchange can still remain legally uncertain.
What the SEC Is Proposing
The safe harbor is part of the SEC proposal round around Regulation Crypto Assets, which was introduced in August. The idea is that a token can, under certain conditions, stop being treated as an investment contract. Issuers would then need to complete or permanently stop all promised essential management efforts, make no new commitments, and file a transition report known as Form TR.
The SEC would still keep room to review whether those conditions were actually met. If a filing turns out to be inaccurate, the regulator could still conclude that the investment contract has not ended. Under the proposal, other parties could also continue arguing that a token is still a security.
Why This Matters for Europe
For European crypto investors, this is especially relevant because the debate shows how hard token listings can still be, even when a project has been around for years. It also highlights that clearer rules do not automatically mean exchanges will add new tokens without extra risk. For firms operating under MiCA, legal certainty around listing policy remains an important issue.
Vault12 is therefore proposing an alternative: a 60-day window during which the SEC could object. After that, a properly filed statement would have to be binding on the regulator, except in cases of fraud or material inaccuracies. The company says this would remove the uncertainty that it believes is holding exchanges back.
Other cases also show how sensitive listings remain. For example, the debate around tokenized stocks on a new exchange already drew objections from several major players, precisely because the legal status of those products is still widely disputed.
