Verra has recently been made aware of crypto market activities such as transacting in tokens that have been generated, minted, or otherwise facilitated by third parties and that aim to represent canceled or retired verified carbon units (VCUs) that have been issued under the Verified Carbon Standard (VCS) Program.

Without expressing an opinion as to the legal nature and environmental integrity associated with these activities and tokens, Verra wishes to emphasize that:

  • Verra does not administer these activities and tokens and in any event takes no responsibility for these activities and tokens;
  • Entities engaging with these activities and tokens do so at their own risk, are responsible for conducting their own due diligence, and cannot look to Verra for any matters connected with these activities and tokens;
  • Tokens that have not been licensed or otherwise authorized by Verra are not verified, endorsed, or recognized by Verra as representing or equating to VCUs or an environmental benefit associated with VCUs.

In this context, Verra recalls the provisions of the Verra Registry Terms of Use, including the following provisions applicable upon the cancelation or retirement of VCUs:

  • All legal and beneficial title and interests in such VCUs will be extinguished and neither Verra, the account holder, nor any other person with legal or beneficial ownership rights will have any further rights to take the benefit of such VCUs or the underlying environmental benefits corresponding to such VCUs (section 8.2);
  • For the avoidance of doubt, the extinguishment of legal and beneficial title and interests in the VCU does not prevent the account holder (or any other person with legal or beneficial ownership rights on whose behalf the VCU is canceled or retired) from making offsetting claims corresponding to the VCU canceled or retired (section 8.3);
  • Verra considers that no person has any further rights to take the benefit of the canceled or retired VCUs or the underlying environmental benefits corresponding to such VCUs (section 8.5).

Verra also reminds account holders in the Verra Registry of their contractual obligation under the Verra Registry Terms of Use not to create, market, or transact in instruments that are related, connected, or linked to VCUs or instruments that have a VCU as their underlying (“related instruments”) without Verra’s express written consent, which is to be granted in Verra’s sole and absolute discretion. Verra reserves its ability to enforce its rights against any account holders who have violated this obligation.

Verra recognizes that there are a growing number of developments in carbon markets, including the establishment of related instruments such as tokens that represent environmental attributes and assets and have the potential to generate climate and sustainable development value. Verra intends to work with new product developers and other market participants to establish transparent, robust, and credible pathways for responsibly associating VCUs with such instruments.