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Comment by femto113 | Hacker News Reader

Even if you believe Telegram was competent and well intentioned the SEC's argument here seems clear and reasonable:

Grams are securities because the Initial Purchasers and subsequent investors expect to profit from Telegram’s work ... Grams are not a currency because, among other things, there are not any products or services that can be purchased with Grams.

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But how is that different than any other Initial Coin Offering?

In most cases there's no difference and the same arguments would apply also for (against) other ICOs. An ICO can be substantially different in these key aspects and in that case it could be legal, but in most cases they really are intended to be de facto investments in uncertain future profit and risk, i.e. securities.

Here's a random example from two years ago https://www.sec.gov/news/press-release/2018-152 of an ICO being shut down and penalties paid. There are more, SEC has been quite active in regulating ICOs.

All the other ICOs are also scams.

Is ethereum a scam? How about MakerDAO?

Essentially. All of these coins have no real world use and everyone knows it, they just think they will the ones profiting on other idiots who buy it at the end.

Actually, I'm really wondering how all these cryptocurrencies are legal. Algorand also started by selling its initial coins, how is that legal?

Almost no token sales are done legally. Ethereum's token sale wouldn't be legal if it was done today but Ethereum is so large that regulators effectively grandfathered it under the "sufficiently decentralized" doctrine.

- Yes

That is a nonsensical statement. ICOs are a way to raise money. There is nothing that inherently deceitful about them. I want to be able to invest into early-stage companies and an ICO is a way.

"there are not any products or services that can be purchased with Grams" at the time of writing.

And I believe omitting the time variable is the greatest omission in what you quoted.

There is no time variable in play here, it’s either a currency at the time that it’s sold, or it’s not. If it’s not a currency at the time that it’s being sold, then it is being sold speculatively – which makes it a security.

Is it possible for something to be sold "speculatively" and not being a security?

Also, can profit be measured not only in money? If so, can something that does not exist be bought to be brought to existence and be profitable and not in money?

For me, TON is an alternative to something like Libra, as I said elsewhere. It is basically same PBFT as Libra (thus - close to realtime operation) but it does not have many Libra flaws.

And I think that is the point the judge missed.

A big difference is that Libra is supposed to have stable value while TON Grams were explicitly designed to appreciate (3x IIRC). Of course, no one is interested in pre-buying a stablecoin years before launch so you can't fund development that way.

Not really. Your security can bootstrap itself into being a currency, but until it does it’s still going to be treated like a security.

You can of course negotiate with the SEC, but they would probably require guarantees, and a definite timeline of your plans... not just the promise of success at some indefinite future date.

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