CFTC Asked to Provide Opinion in SEC Case Against Telegram ICO

CFTC Asked to Provide Opinion in SEC Case Against Telegram ICO

News
7. February 2020. by adminBTC
21
A U.S. decide has requested legal professionals from the Commodity Futures Buying and selling Fee (CFTC) to offer an opinion within the case introduced by the Securities and Change Fee (SEC) in opposition to Telegram’s $1.7 billion token sale. On Thursday, Decide Kevin P. Castel of the Southern District of New York issued an order
Screen-Shot-2017-10-08-at-10.35.17-PM.png


A U.S. decide has requested legal professionals from the Commodity Futures Buying and selling Fee (CFTC) to offer an opinion within the case introduced by the Securities and Change Fee (SEC) in opposition to Telegram’s $1.7 billion token sale.

On Thursday, Decide Kevin P. Castel of the Southern District of New York issued an order inviting the CFTC’s workplace of the overall counsel “to specific its views on the problems presently earlier than the Courtroom.” The opinion could be submitted in writing, the decide mentioned.

Whether or not “gram,” the cryptocurrency of Telegram’s TON blockchain, is a safety or a commodity has been the primary query of the four-month-long litigation. The SEC insists the not-yet-issued grams have been offered to traders as securities, with the expectation of future earnings.

Telegram maintains that, identical to bitcoin and ether, as soon as grams are issued they are going to be a commodity – merely the native token of the TON blockchain.

In a memorandum beforehand submitted to court docket, the SEC mentioned there isn’t any method grams might be thought-about a commodity, as “the worth of that asset may have depended and can nonetheless depend upon Telegram’s efforts to extend demand for and, thus, enhance the worth of that asset as purchasers fairly anticipated and can count on.”

“Not like gold, comedian books, and Krispy Kreme donuts – commodities Telegram compares to Grams – Grams haven’t any intrinsic worth,” the SEC argues, so the worth of grams depends solely on Telegram’s efforts to create a blockchain, and this, in keeping with the Howey check, is a function of a safety.

Telegram, in its responding memorandum, argued that it had by no means marketed grams as an funding device, however all of the advertising supplies “clearly and primarily emphasised the meant consumptive worth of Grams as ‘the primary mass-market cryptocurrency.'” The primary worth proposition has been that the tokens will probably be extensively adopted by customers when TON is dwell, the memorandum goes.

The CFTC has beforehand acknowledged that cryptocurrencies “akin to bitcoin” meet the definition of a commodity, nonetheless, the company has not expressed its opinion on token gross sales like Telegram’s. In a joint Wall Avenue Journal op-ed in 2018, SEC and CFTC chairmen Jay Clayton and Christopher Giancarlo mentioned that “lots of the internet-based cryptocurrency buying and selling platforms have registered as cost providers and are usually not topic to direct oversight by the SEC or the CFTC.”

Additionally on Thursday, Decide Castel ordered that the primary listening to for the case be rescheduled from Feb. 18 to Feb. 19, citing a delay in one other trial as the explanation for the rescheduling.

Disclosure Learn Extra

The chief in blockchain information, CoinDesk is a media outlet that strives for the best journalistic requirements and abides by a strict set of editorial insurance policies. CoinDesk is an unbiased working subsidiary of Digital Foreign money Group, which invests in cryptocurrencies and blockchain startups.



Supply hyperlink

Add a comment

How to whitelist website on AdBlocker?

How to whitelist website on AdBlocker?

  1. 1 Click on the AdBlock Plus icon on the top right corner of your browser
  2. 2 Click on "Enabled on this site" from the AdBlock Plus option
  3. 3 Refresh the page and start browsing the site