The battle between privacy applications and the rest of the technology sector is intensifying. Telegram is in the middle of a massive investigation by the Security Exchange Commission (SEC), and the details that are coming out aren’t super helpful for the crypto world at large.
The CFTC (Commodity Futures and Trading Commission) published a letter in mid-February explaining their views on the Telegram case and how their token, GRAM, should be classified. The letter points out what Telegram has been saying about their token:
“We understand that the defendant, Telegram Group, Inc., argues that its planned digital currency, the ‘Gram,’ will be a commodity and not a security, and therefore not subject to registration under the Securities Act of 1933 (“’33 Act”).”
However, the letter goes on to point out that even though a token may be considered a commodity, certain securities laws may apply. The CFTC has no reason to rule on what the GRAM token should be classified as, and this is more of a political overture to show their willingness to follow the SEC in whatever they deem to be the best descriptor of Telegram’s token.
Wrong Place, Wrong Time?
Maybe this is just an unfortunate position for Telegram to be in as they are a “test” for the crypto community at large. Everyone has been wondering how tokens would be treated by the SEC, and the fact that Telegram has a product already functioning might have made them the perfect target for the SEC .
The crux of the argument right now is whether a token sale is actually an investment contract. Of course, crypto companies are going to argue one way, but the SEC’s insistence that digital currencies are securities and should be subject to securities laws and taxed as such.
Other Privacy Implications
At this exact time, the CEO of Telegram, Pavel Durov, has been talking about how Whatsapp and iCloud are spying apps that make it easy for the US government to conduct surveillance. The fact that private messages can be datamined and are stored by these companies is dangerous and something he would like to focus on.
One interesting trend that may be observed about the crypto sphere is that it is largely a reaction to problems with many legacy business models. People don’t like how Facebook and other large companies work, and need the innovations provided by blockchain technology to supercede them. With companies like Brave (Basic Attention Token), Monero, and Telegram, the privacy problems of the world are on their way to being solved. We just need to pay more attention.