Wednesday, January 22, 2020

The Chamber of Digital Commerce Files An Amicus Brief in Telegram-SEC Conflict

The Chamber of Digital Commerce, an American advocacy group that promotes the emerging industry behind blockchain technology, bitcoin, digital currency and digital assets, has intervened in the Telegram-SEC Gram token sale case just after the US market regulator requested the court to issue a summary judgement against the defendants.

The Chamber of Digital Commerce filed an amicus curiae brief to the District Court for the Southern District of New York on January 21, authored by Lilya Tessler, a counsel to Chamber of Digital Commerce. The document filed makes a number of arguments on how the court should consider digital assets.

The document states that not all the digital assets should be regulated as security which is main point of Securities and Exchange Commission (SEC) in this case and that is what privacy-focused messaging platform is denying all the time.

The documents reads:

“Further, a digital asset is not a security solely by virtue of being in digital form or recorded in a blockchain database.”

The Chamber requests the court to distinguish the subject of an investment contract (the digital asset) with the securities transaction associated with it. The documents says that the schemes in which the purchase is motivated primarily by an expectation of profit from the seller’s efforts, thus an investment product, should fall under the securities laws.

telegram ton

The amicus brief also stress that not all transactions or activities involving digital assets require the unique protections of the securities laws saying that there are regulators other than SEC as well. The Chamber requests court to consider a multiple regulatory regimes before finalizing its decision on this case.

The end of page 15 and start of 16 of the documents reads:

“Depending on the relevant activity, other regulatory regimes exist to protect purchasers or counterparties. For example, fraud and market manipulation in certain digital asset transactions (depending on the facts and circumstances) is subject to CFTC enforcement authority. Other activities involving digital assets may also be subject to the Bank Secrecy Act, federal and state consumer protection laws, state money transmitter licensing laws, and state laws specific to virtual currency transactions, such as New York’s Virtual Currency Business Activity law. The Chamber respectfully requests that the Court consider these existing regulatory regimes in crafting its decision in this case.”

The Chamber also made clear that it was not going to offer its view on “whether the offer and sale of Grams is a securities transaction, the Chamber has an interest in ensuring that the legal framework applied to digital assets underlying an investment contract is clear and consistent.”

As Crypto Economy reported that in a notice on January 6, the company made it clear that its Gram token were neither supposed to make you rich, nor an investment product. In fact, according to the company, the Gram tokens are intended as a utility token to be used within the TON blockchain.

What relief does this intervention of Chamber of Digital Commerce brings to Telegram? The community have to wait the until the court releases its summary judgement.

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