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The U.S. Securities and Exchange Commission said in a filing to Caroline Ellison and Gary Wang that FTX’s Exchange Tokens (FTTs) are considered securities given that they were sold as investment contracts.
according to Howie The test used by the SEC to classify security tokens states that a transaction is an investment contract if there is an investment of funds in a general enterprise with a reasonable expectation of profit from the efforts of others. is considered.
According to the SEC filing, Since the launch of the FTT on July 29, 2019, the FTT has been offered and sold as an investment contract, ensuring security. It reportedly raised approximately $10 million from its initial public offering of exchange (IOE) and used the funds to further FTX’s development, marketing, and business operations.
FTX allegedly promised higher returns if investors bought FTT tokens.
If demand for trading on the FTX platform increases, demand for FTT tokens is likely to increase, and FTT price increases will benefit FTT holders equally and proportionally to their FTT holdings. SEC said.
Additionally, the SEC emphasized that FTX’s FTT marketing materials were filed with potential earnings that would incentivize more investors to hold on to FTT in anticipation of profits from network effects.
In light of the SEC declaring FTT as a security token, the FTX exchange and its executives, including Sam Bankman-Fried, Caroline Ellison and Gary Wang, are indicted for fraud related to the issuance of unregistered securities. It’s a schedule.
Sam Bankman-Fried is expected to arrive in the United States early December 22, as Caroline Ellison and Gary Wang pleaded guilty to criminal charges imposed by the United States District Court for the Southern District of New York.
At the time of writing, the FTT token is trading below $0.80, down more than 98% from its September 9, 2022 high of $85.
