In a lawsuit filed against Alameda’s former CEO and FTX co-founder, the U.S. Securities and Exchange Commission (SEC) said that FTX’s trading token FTT was sold as an investment contract and is a “security.” The SEC stated in its complaint that “if trading demand on the FTX platform increases, demand for FTT tokens may increase, so any price increase of FTT will benefit FTT holders equally and in proportion to their holdings of FTT. The purchase and destruction plan of FTT is similar to a stock buyback, using revenue from FTX to buy back and destroy FTT, thereby increasing its value.”
