TechFlow News — According to CoinDesk, the U.S. Securities and Exchange Commission (SEC) stated in a lawsuit filed on Wednesday against Gary Wang, co-founder of FTX, and Caroline Ellison, former CEO of Alameda Research, that FTX’s exchange token FTT was sold as an "investment contract" and therefore constitutes a “security.” This move could have broad implications for the industry.
In its complaint, the SEC wrote: “If trading activity increased on the FTX platform, demand for the FTT token could increase, and any resulting price appreciation would benefit FTT holders proportionally based on their holdings. By allocating large numbers of tokens to FTX, FTX’s management team was incentivized to take actions to attract more users to the trading platform, thereby increasing demand for the FTT token and driving up its trading price.” The SEC emphasized in the filing that proceeds from the sale of the tokens were used to fund the development, marketing, operations, and growth of FTX, using language that underscored FTT as an “investment” with profit potential.
Earlier today, it was reported that the former CEO of Alameda and FTX co-founder had each pleaded guilty to criminal charges brought by U.S. prosecutors and fraud charges filed by the U.S. Commodity Futures Trading Commission (CFTC). The SEC has accused Caroline Ellison and Gary Wang of defrauding FTX investors, and both parties have agreed to two settlement agreements pending court approval. SBF has been taken into custody by the FBI.Original link
