Why Telegram’s TON Token is in Trouble

SEC Attacks Telegram

Lately, the Securities Exchange Commission (“SEC”) has cracked down on huge ICOs that failed to register their tokens as securities.  The conversation of whether a cryptocurrency is a commodity or security is ongoing, but it seems that ICOs that have raised huge investments should be considered as a security. This makes perfect sense. The US Government does not want a company like Telegram to raise $1.7 Billion without registering its token as a security. These are private and public investors who are expecting future earnings from TON Tokens, so it should be reasonable for Telegram to register the TON Token as a security.

Telegram Fights Back, Claiming Not a Security

The SEC filed an emergency injunction (as in, they froze Telegram’s token) to prevent Telegram from distributing its gram tokens on Oct. 11. In Wednesday’s filing, Telegram claims that gram tokens are not securities, and the SEC’s emergency action “runs counter to longstanding Supreme Court precedent, the SEC’s own views relating to other cryptocurrencies, and common sense.”

Is TON a Security or Commodity?

It is still uncertain if cryptocurrencies are in fact securities, considering that the Commodity Futures Trading Commission (“CFTC”) recently stated that cryptocurrencies are commodities. Keep in mind, a cryptocurrency can still be considered as a security when it is a commodity, depending on how the cryptocurrency is being used. Odds are, a company that publicly announces huge investors is a security. Telegram is not the first to have problems with the SEC and they certainly are not the last.

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