The US Securities And Exchange Commission Immediately Express The FTT Token As A Securities

SEC categorizes tokens published by FTX as securities. (Photo; Doc. News BTC)

JAKARTA US Regulator, Securities and Exchange Commission (SEC) recently stated that the token issued by the FTX crypto exchange, namely the FTT, is a security. The statement was made by the SEC after the bankruptcy of FTX.

The SEC assesses that FTT tokens operate by means of buy and burn or buy and burn. The program initiated by FTX is synonymous with share buyback. Because it is a securities behavior, the FTT is categorized as a security.

On December 21 yesterday, the SEC assessed the crypto exchange FTX which sold its FTT tokens as an investment contract including those in the securities. Before FTX declared bankruptcy, partnering company Alameda Research announced it was selling stablecoins worth IDR 4.5 trillion.

Binance responded immediately. MISSing shortly after, Changpeng Zhao announced in a Twitter post that it would sell all of its FTT tokens. Sales are made in stages so as not to affect the market.

However, this action actually triggered massive sales of FTT traders and investors. To date, the price of FTT tokens has fallen free up to 98 percent. This condition triggered FTX to experience a liquidity crisis and declared bankruptcy. The main factor that makes FTX collapse is the stock exchange consumer funds sent to Alameda Research for trading.

On the other hand, the SEC revealed that if trading on the FTX stock exchange increases, the purchase of FTT tokens will also increase. This condition benefits FTT token holders. Especially the owner of FTT within the company.

"If demand for trading on the FTX platform increases, demand for FTT tokens can increase, so any increase in FTT prices will benefit FTT holders evenly and directly proportional to their FTT holdings," the SEC said.

The large allocation of tokens to FTX incentives FTX management teams to take steps to attract more users to trading platforms and, therefore, increase demand for, and increase trading prices, FTT tokens," the US regulator added.

Commenting on this, FTX stated that it used the proceeds from the sale of FTT tokens to fund the development, marketing, business operations, and growth of the FTX crypto exchange. The US Securities and Exchange Commission clearly explained that the token promised profit.

"The FTT material makes it clear that the FTX core management team's efforts will drive FTX's growth and final success," the SEC said. In addition, the SEC also mentioned a "buy and burn" program initiated by crypto exchange FTX.

Securities regulators say that the initiative is similar to many other crypto exchange tokens and is similar to the share buyback where revenue from FTX will buy back and burn FTT to increase the value of the token.

However, the SEC's assessment regarding crypto tokens published by FTX is considered too late. The reason is, the SEC categorization related to FTT tokens was categorized after the company filed for bankruptcy. The same thing was expressed by Ripple CEO Brad Garlinghouse, who stated that SEC Chairman Gary Gensler had failed to predict the collapse of FTX. That means regulators are unable to anticipate the losses suffered by investors on the exchange.