Fun

Telegram Responds to SEC: Gram Tokens Are Not Securities

News Feed - 2019-10-18 12:10:18

Telegram is pushing back against the U.S. Securities and Exchange Commission (SEC).


The messaging platform filed a response to the securities regulator Wednesday, writing that the SEC’s emergency injunction last week was unwarranted. Telegram is asking a federal court to deny the regulator’s motion to enforce a subpoena.


Further, Telegram argued its upcoming gram token is not a security, and the SEC should not be able to force the company to produce documents or witnesses about its blockchain project.


The SEC filed an emergency action to prevent Telegram from distributing its gram tokens on Oct. 11, alleging that Telegram violated federal law by selling an unregistered security. In Wednesday’s filing, Telegram claims that gram tokens are not securities, and the SEC’s emergency action “runs counter to longstanding Supreme Court precedent, the SEC’s own views relating to other cryptocurrencies, and common sense.”


The filing explained that Telegram “did not … offer any securities to the public” through an ICO, referencing the $1.7 billion it raised using a Simple Agreement for Future Tokens (SAFT) framework.


“Telegram entered into private purchase agreements with a limited number of highly sophisticated purchasers (the ‘Private Placement’) that provided for the future payment of a currency (grams) but only following the completion and launch of the TON Blockchain,” the filing said, adding: “Significantly, Telegram has already treated the Private Placement as a securities offering pursuant to valid exemptions to registration under the Securities Act of 1933. The grams themselves, as distinct from the purchase contracts, will merely be a currency or commodity (like gold, silver or sugar) — not a ‘security’ — once the TON Blockchain launches. “


As a result of the SEC’s action, however, Telegram is ready to hold off on launching the TON blockchain network and distributing tokens until all “regulatory issues are resolved,” the filing said.


Telegram emailed its investors after the SEC’s action, noting that while the company intended to launch TON at the end of October, “the recent SEC lawsuit has made that timing unachievable.” The email asked investors to grant the company an extension of time to get the network running, noting a clause in the investor contracts offering a refund if TON was not live by its Oct. 30 deadline.


In the filing, Telegram asked the court to deny the SEC’s injunction request, including the SEC’s demand for Telegram to produce documents and witnesses; as well as have the court call on the SEC and Telegram to submit “an expedited case schedule to resolve the legal issues underpinning the SEC’s claims.”


“There is no need for the Court to enter a preliminary injunction, which has the potential to be misconstrued by Telegram’s private placement subscribers and the public in this highly-publicized matter, where Telegram has already voluntarily agreed not to engage in the very conduct that the SEC is seeking to enjoin,” the filing said.


In supplementary material, Telegram’s attorneys attached a copy of the subpoena served by the SEC and email correspondence between the SEC and Telegram.


Telegram image via Shutterstock

News Feed

Belgium Startup Launches Smart Chip Hardware Wallet for SLP-Based Tokens
Belgium Startup Launches Smart Chip Hardware Wallet for SLP-Based Tokens On March 1, the Simple Ledger Protocol (SLP) developers’ Twitter account revealed a new hardware wa
Bitcoin’s Value Dropped 8% This Week, Analyst Says Equities Correction Could Impact Crypto
Bitcoin"s Value Dropped 8% This Week, Analyst Says Equities Correction Could Impact Crypto Digital currency markets have slipped in value this week as bitcoin ha
Kucoin Hacked for $150 Million in Bitcoin; Bitfinex and Tether Freeze $33 Million of the Stolen Funds
Kucoin Hacked for $150 Million in Bitcoin; Bitfinex and Tether Freeze $33 Million of the Stolen FundsCryptocurrency exchange Kucoin may have been hacked for $150 million in bitcoin
Will the Bitcoin halving bring more institutional investors into crypto?
Andrew Singer9 hours agoWill the Bitcoin halving bring more institutional investors into crypto?The Bitcoin ETFs appear to have opened many institutions’ eyes to Bitcoin as an alternate asset. Will the April halving ac
Bitcoin still lacks $60K support as BTC price nears $100M liquidity zone
William Suberg10 hours agoBitcoin still lacks $60K support as BTC price nears $100M liquidity zoneBitcoin traders are upping the stakes amid a tightly rangebound few days for BTC price action.5585 Total views3 Total shar
Nissan launches metaverse experience blending car history with driver education
Tristan Greene4 hours agoNissan launches metaverse experience blending car history with driver educationThe new experience is available on VRChat for Meta Quest.907 Total views6 Total sharesListen to article 0:00NewsOwn
Report: Nigerian Lawmakers Set to Pass Law That Diminishes Central Bank Influence on Crypto
Report: Nigerian Lawmakers Set to Pass Law That Diminishes Central Bank Influence on Crypto Nigeria is expected to designate cryptocurrency as capital for investment if the country
‘Bullish narratives’ erupt as XRP surges 35% this week
Ciaran Lyons3 hours ago‘Bullish narratives’ erupt as XRP surges 35% this weekXRP has surged 35% this week and some traders are anticipating a breakout moment, pointing to a long-term trend they’ve been observing on
New York City Mayor-Elect Eric Adams Will Take First 3 Paychecks in Bitcoin, Promises to Make NYC Center of Crypto
New York City Mayor-Elect Eric Adams Will Take First 3 Paychecks in Bitcoin, Promises to Make NYC Center of Crypto New York City Mayor-elect Eric Adams says that he will take his f
Bitcoin In 2025: History Could Repeat With A 2017-Style Surge
Este artículo también está disponible en español. In a video titled “The Macro Outlook for 2025: BIG Moves Ahead,” Julien Bittel, Head of Macro Research at Global Mac
Top US Food Co-Op to Track Seafood Using Mastercard’s Blockchain Tech
A food provenance platform utilizing blockchain technology from Mastercard is see real-world use by a U.S. food co-operative giant. Announced Sunday, Envisible – a firm providing
Economist Peter Schiff Warns the US Dollar Will Crash — Says ‘We’re Going to Default’
Economist Peter Schiff Warns the US Dollar Will Crash — Says "We"re Going to Default" Economist Peter Schiff has warned that the U.S. dollar will crash. Noting that the U.S. is &