Gram, Telegram's cryptocurrency, is worth nothing, the SEC supports it

By Roberto D. | CryptoFarm | 30 Jan 2020

I have spoken many times about the lawsuit involving Telegram for the issuance of its token (Gram), dragged onto the defendants' bench by the SEC for having evaded the US legislation governing the issue of securities; On January 27, a new hearing was held at the Southern New York District Court during which the prosecution (i.e., SEC attorneys) claimed that Gram is worth substantially nothing.

In more detail, the Securities and Exchange Commission lawyers argued that:

Telegram offered and sold its tokens as securities when it promised to deliver them in exchange for funds under the Purchase Agreements.

This reality will not change if the Court allows Telegram to deliver Gram to initial buyers as part of a large public distribution, which violates Section 5 and which the Court should impose

The SEC argues that Gram is not a commodity because it has no intrinsic value but the point, which will lead the court to recognize the SEC's reasons, is not in my opinion; intrinsic value is an old argument from cryptocurrency detractors, used against practically any currency (including bitcoin) but which, of course, crypto advocates reject entirely.

Basically, nothing has an intrinsic value, whatever acquires value on the basis of a demand, in the absence of demand, however much claims can be made on the value of a given asset, it remains substantially worthless.

The most trivial example that can be made of how true this is concerns the real estate market; how much is a house worth? The owner of the property does not decide, the market decides; the owner of the property can also hyper-evaluate the value of his property, but he will not find buyers willing to buy and, therefore, consequently, the value of that property is zero.

Although this argument of mine may seem like a provocation, the market is chock full of properties that for years have been unable to be sold so much that in the end a trend is developing (in certain areas of the country) for which the owners, exasperated by having to pay the taxes, they get to give away their properties to get rid of them.

Consequently, that of intrinsic value is a rather silly argument, which perhaps holds on an academic level but not in reality; to conclude, a crypto has no intrinsic value, but if the demand is high (for reasons that concern us only relatively and which can also refer to mere speculation) to say that that currency has no value is at least arbitrary.

Returning to the SEC, the reason why in the end, in my opinion, will win the case against Telegram is precisely the fact that the company has eluded the legislation on the issue of securities; Telegram in practice sold its tokens only to investors credited in the initial offer, thus circumventing the US legislation that would have required registration as securities, however the holders of the coins, once they got hold of them, could have sold them on the markets, ending up so to contravene the provisions of American law.