Ripple (XRP), Polymath (POLY), and Maker (MKR) tokens were the biggest losers as the first ratings were released by the Crypto Rating Council, the body made up of US-based exchanges that was announced yesterday. The trio received the worst ratings according to the new unofficial rankings, compiled by the new group in consultation with lawyers and crypto experts, with POLY and MKR coming out bottom of the pile that saw stalwarts Bitcoin (BTC), Monero (XMR), Litecoin (LTC) occupy the top spots alongside Dai (DAI) in the controversial new rankings.
MKR, POLY, and XRP Bring up the Rear
The rankings were introduced by the exchanges as a means of assisting in deciding whether certain tokens could potentially be judged securities by the Securities and Exchange Commission (SEC) down the line, scoring them with a rating of 1-5, with a score of 5 representing characteristics “strongly consistent” with those of a security. MKR and POLY received the joint worst scores of 4.5, with MKR being accused of using “securities-like language” and “suggesting an opportunity to earn profits” in their marketing material, while POLY allegedly sold tokens/token interest “prior to the existence of a token utility” among other failures. A particularly interesting score was that of XRP, which is currently facing a class action lawsuit on the basis of it being sold as a security – it scored a 4 on the scale due to a combination of the issues found with POLY and MKR. This result was taken as a victory by some in the XRP community, who mistook the score and its reasoning as confirmation of their bias:
BREAKING NEWS: THE CRYPTO RATING council has rated XRP as a NON SECURITY! 5 is a security #XRP got a 4!
WHAT HAVE WE BEEN SAYING ALL ALONG?
— XRP Researcher | XRP Investor (@XRPNews_) September 30, 2019
EOS Fine Brings Immediate Questions
The ratings were already a talking point within the crypto community even before the SEC announced that they had fined EOS founders Block.One $24 million for selling unlicensed securities, having just awarded them a score of 3.75. The Council praised EOS’s “absence of investment-like language or marketing” but warned against its current functionality and the amount of money raised ($4.1 billion). Four hours later the SEC announced that Block.One had failed to register as a seller of securities, marking EOS down as an instant 5 and invalidating their score almost immediately.
*OFFICIAL CRYPTO RATINGS COUNCIL”
WE HAVE ASSEMBLED OUR BEST AND FOUND$EOS IS AT HIGH RISK – 3.75 / 5 FOR BEING A SECURITY
SEC (SECURITIES and Exchange Commission) – alright $EOS here’s a slap on the wrist have at it ya crazy bastards
— Moon Overlord (@MoonOverlord) September 30, 2019
So the Crypto Rating Council (CRC) gave EOS a 3.75…..yet the SEC just declared EOS a security? Hmmmm…… pic.twitter.com/xpNXY5Y1sn
— CryptoBond007 (@bond007_crypto) October 1, 2019
Not the most auspicious start for the Crypto Rating Council – here’s hoping the future is a little brighter.