The Securities and Exchange Commission (SEC) of the US government allowed the gaming startup Pocketful of Quarters (PoQ) to issue tokens on the Ethereum blockchain and admitted that they were not related to securities.
PoQ can legally sell its Quarters tokens to consumers without registering them as securities, the Finance Department of the SEC writes, and this is the second such letter – the first time such letter was awarded to TurnKey Jet in April.
ERC20 Quarters tokens are the first tokens on the Ethereum blockchain that have received US regulatory approval.
In a letter dated July 25, Jonathan Ingram, General Counsel for SEC FinHub, wrote: “Based on the facts presented, the unit will not recommend the Commission to take enforcement measures <…> if PoQ will offer and sell Quarters tokens without registration in accordance with Section 5 of the Securities Act and permits not to register Quarters tokens as a class of equity securities in accordance with Section 12 (g) of the Exchange Act. ”
According to PoQ CEO George Weixner (he launched ICO at 11 years of age), the token is a steylockcoin, and PoQ sets the price for Quarters as the only seller. This is part of the company’s compliance requirements with SEC. (The smart contract prevents tokens from being sent to unapproved accounts, thereby limiting secondary trading.)
Weiksner hopes that Quarters will improve the gameplay for players who are tired of spending large amounts on different gaming platforms, adding: “This is the way to make games better.”
“The most important thing for teenage boys is playing video games, this may be the first financial product they have – and it will be a cryptocurrency wallet,” said Michael Weiksner, director of the company (and George Weixner’s father).
According to Weiksner Sr., PoQ is in talks with Apple and Google to sell Quarters tokens in the app stores and Google Play, respectively.
SEC requires PoQ to fulfill a number of obligations, including ensuring that players cannot sell, buy, or exchange tokens between themselves. In addition, Quarters tokens “will be immediately used for their intended purpose” with the PoQ gaming platform as soon as sales begin.