Wednesday, February 19, 2020

Telegram and SEC Meet In Court

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Telegram and the U.S. Securities and Exchange Commission (SEC) are facing a  New York federal judge today, February 19.

This case is believed to affect the future of cryptocurrency and digital assets.

The instant messaging platform is seeking that its digital token (Gram) sale should be allowed to move forward as the SEC wants to further block its USD 1.7 billion project. It’s the SEC contention that Gram is a security and should be regulated like any other stock, bond, or other traded assets.

SEC also charges the instant messaging app with the violation of investor protection laws.

Although, it’s not sure where the judge, Judge P. Kelvin Castel will be leaning in his judgement. However, attorneys told Law360 they do not expect any resolution at the hearing Wednesday. The judge is expected to rule on the preliminary injunction tendered. This case is said to be seminal in the handling of crypto-assets and digital assets in the near future.

This case could offer insight or a glimpse into the regulation and control of crypto-assets in the future. At least, in the United States, for now. A stiffened regulatory control of tokens could lead to major changes in the industry.

“Given the size of the offering and the different players here… I think this will be a seminal case going forward,”

 Rebecca Rettig, a partner and litigator focused on fintech at FisherBroyles LLP, told Law360.

“Issuers, brokers, exchange platforms, payments service providers, investors and others will all need to consider the extent to which a given token falls within the perimeter of regulators in the relevant jurisdictions, as this may have a substantial impact upon their obligations and/or rights within the market,”

 Peter Stewart, an associate at law firm Cooke Young and Keidan, recently wrote in Global Legal Post.

Even though the U.S. Commodity Futures Trading Commission (CFTC) said that “we express no view on” whether Gram is a security or commodity, the fears are legitimate and this could lead to a drastic change in the holding and exchange of tokens and crypto-assets.

The post Telegram and SEC Meet In Court appeared first on Crypto Economy.


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