A U.S. decide has requested attorneys from the Commodity Futures Trading Commission (CFTC) to offer an opinion inside the case introduced by the Securities and Exchange Commission (SEC) towards Telegram's $1.7 billion token sale.
On Thursday, Judge Kevin P. Castel of the Southern District of New York issued an order invitatory the CFTC's work of the overall counsel "to express its views on the issues presently before the Court." The opinion power be submitted in writing, the decide mentioned.
Whether "gram," the cryptocurrency of Telegram's TON blockchain, is a safety or a good has been the primary query of the four-month-long litigation. The SEC insists the not-yet-issued grams had been bought to traders as securities, with the expectation of future income.
Telegram maintains that, identical to bitcoin and ether, as soon as grams are issued they are going to be a good - but the native token of the TON blockchain.
In a memo beforehand submitted to courtroom, the SEC mentioned there isn't any manner grams may very well be thought-about a good, as "the value of that plus will have depended and will still depend on Telegram's efforts to increase demand for and, thus, increase the value of that plus as purchasers reasonably expected and will expect."
"Unlike gold, comedian books, and Krispy Kreme donuts - commodities Telegram compares to Grams - Grams don't have any intrinsic worth," the SEC argues, so the worth of grams depends entirely on Telegram's efforts to create a blockchain, and this, in line with the Howey get a load at, is a function of a safety.
Telegram, in its responding memo, argued that it had not by a blame sigh marketed grams as an funding software, notwithstandin all of the advertising and insurance " title="marketing platforms" target="_blank">marketing platforms " title="marketing" target="_blank">marketing supplies "clearly and primarily stressed the supposed consumptive worth of Grams as 'the primary mass-market cryptocurrency.'" The principal worth proposition has been that the tokens can be extensively adopted by customers when TON is reside, the memo goes.
The CFTC has beforehand acknowledged that cryptocurrencies "similar to bitcoin" meet the definition of a good, nevertheless, the company has not expressed its opinion on token gross revenue like Telegram's. In a joint Wall Street Journal op-ed in 2019, SEC and CFTC chairmen Jay Clayton and Christopher Giancarlo mentioned that "most of the internet-based cryptocurrency buying and insurance " title="marketing platforms" target="_blank">marketing platforms have registered as cost companies and ordinarily are not topic to direct oversight by the SEC or the CFTC."
Also on Thursday, Judge Castel ordered that the primary hearing 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.
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