CFTC Asked to Provide Opinion in SEC Case Against Telegram ICO

CFTC Asked to Provide Opinion in SEC Case Against Telegram ICO 1

A U.S. judge has asked lawyers from the Commodity Futures Trading Commission (CFTC) to provide an opinion in the case brought by the Securities and Exchange Commission (SEC) against Telegram’s $1.7 billion token sale.

On Thursday, Judge Kevin P. Castel of the Southern District of New York issued an order inviting the CFTC’s office of the general counsel “to express its views on the issues presently before the Court.” The opinion can be submitted in writing, the judge said.

Whether “gram,” the cryptocurrency of Telegram’s TON blockchain, is a security or a commodity has been the main question of the four-month-long litigation. The SEC insists the not-yet-issued grams were sold to investors as securities, with the expectation of future profits.

Telegram maintains that, just like bitcoin and ether, once grams are issued they will be a commodity – simply the native token of the TON blockchain.

In a memorandum previously submitted to court, the SEC said there’s no way grams could be considered a commodity, as “the value of that asset will have depended and will still depend on Telegram’s efforts to increase demand for and, thus, increase the value of that asset as purchasers reasonably expected and will expect.”

“Unlike gold, comic books, and Krispy Kreme donuts – commodities Telegram compares to Grams – Grams have no intrinsic value,” the SEC argues, so the value of grams relies exclusively on Telegram’s efforts to create a blockchain, and this, according to the Howey test, is a feature of a security.

Telegram, in its responding memorandum, argued that it had never marketed grams as an investment tool, but all the marketing materials “clearly and primarily emphasized the intended consumptive value of Grams as ‘the first mass-market cryptocurrency.'” The main value proposition has been that the tokens will be widely adopted by users when TON is live, the memorandum goes.

The CFTC has previously stated that cryptocurrencies “such as bitcoin” meet the definition of a commodity, however, the agency has not expressed its opinion on token sales like Telegram’s. In a joint Wall Street Journal op-ed in 2018, SEC and CFTC chairmen Jay Clayton and Christopher Giancarlo said that “many of the internet-based cryptocurrency trading platforms have registered as payment services and are not subject to direct oversight by the SEC or the CFTC.”

Also on Thursday, Judge Castel ordered that the first hearing for the case be rescheduled from Feb. 18 to Feb. 19, citing a delay in another trial as the reason for the rescheduling.

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews

Automated trading with HaasBot Crypto Trading Bots

Crypto Scams

Millions in Cryptocurrency Stolen by Scammers in the Last Month According to Tenable Research
November 24, 2021
Behind The Scenes: How this Crypto Community Responded to + $50m Hack
October 18, 2021
Crypto Scams
Crypto Scams Still Persistent In 2021, SEC Warns About Red Flags To Watch
September 9, 2021
Poly Network
Here’s How Hackers Stole Over $600 million in the Poly Network Attack
August 12, 2021
The World’s Most Infamous Crypto Hacks and Scams
July 31, 2021

Blockchain/Cryptocurrency Questions and Answers

How Does Bitcoin Casino Work + 2021 Beginner’s Guide
November 8, 2021
How to Buy and Sell Cryptocurrency
November 8, 2021
What Are Bitcoin Futures And How Will They Work In 2022?
November 4, 2021
The Unconventional Guide to Ethereum
October 28, 2021
ICo Presale
The Science Behind ICO Presales…
October 14, 2021

CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin33,495 0.03 % 6.81 % 22.32 %
Ethereum2,212.8 0.19 % 11.74 % 34.07 %
Tether0.9990 0.14 % 0.50 % 0.13 %
Binance Coin343.17 0.39 % 10.53 % 31.17 %
USD Coin0.9977 0.25 % 0.16 % 0.20 %
Cardano0.9705 0.60 % 13.64 % 31.14 %
XRP0.5652 0.25 % 9.30 % 27.49 %
Solana83.12 0.33 % 18.56 % 43.82 %
Terra60.89 0.13 % 11.58 % 30.02 %
Polkadot16.23 0.37 % 13.40 % 41.49 %

Bitcoin (BTC) $ 33,650.00
Ethereum (ETH) $ 2,217.27
Tether (USDT) $ 1.00
Binance Coin (BNB) $ 342.66
USD Coin (USDC) $ 1.00
Cardano (ADA) $ 0.971255
XRP (XRP) $ 0.567745
Solana (SOL) $ 82.92
Terra (LUNA) $ 60.85
Polkadot (DOT) $ 16.26