Telegram Responds to SEC: Gram Tokens Are Not Securities - CoinDesk
SEC Showing Their Ability to Disrupt Innovation
The SEC stated that the issuance of the tokens, in their view, represents securities which would then lead for them to be in violation of the Securities Acts that establish key filing, process, and disclosure requirements for issuing Securities. Telegram states that they have entered into agreements with investors under the premise that the issuance complies with the exemptions offered under the same laws given the view that the token is not a security. I recalls seeing the whitepaper and the requirements to participate and it did seem that Telegram were being careful with the token issuance.
“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. “
This has also forced Telegram to email participants to warn them that the project will be delayed which has had further implications as the delay of the issuance will provide some investors the opportunity to back out from the investment. It seems that they had two rounds of capital raises which is then treating investors differently for these delays. Some may have the right to get up to 77% of their investment back if certain clauses of the agreements are triggered.
This is a highly anticipated blockchain project so it is very sad that it has run into this regulatory scrutiny so close to its launch. Given the guidance the SEC had provided months ago, I am surprised that it has come to these extremes of legal actions and injunctions as it seems as both sides knew well of each others positions. I understand in some cases why the SEC puts their duty to protect investors front and center but cannot see it in this case where it is so high profile and backed by a large amount of investors that seem to fall in the accredited class. This may be an important step in the future of ICOs in the space!
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Telegram should challenge the constitutionality of SEC regulation of crypto. Crypto is just a immutable public ledger AKA a printing press.
The First Amendment protects it from Federal government regulation.
That is an interesting perspective although the precedent is probably on funding and not the printing of anything whether physical or digital. However, I think they are doing their economy a disservice by limiting growth and innovation in the technology and the markets it is creating.
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Sad news indeed.
Already these days, with the problems faced by another private cryptocurrency project (Alliance LIBRA), I had seen news that seems to point to a strong rejection or at least resistance from regulatory bodies of different National States to stop or stop the advance of this blockchain technology.
I do not know if it will be the case that they intentionally oppose this technology and the changes they represent or it will simply be the fear or "resistance to change" that can be pointed out at different times of change in history.
Great stuff @newageinv
Upvoted and resteemed.