Chamber of Digital Commerce, Blockchain Association File Amicus Brief’s In SEC/Telegram Case
An amicus brief was just filed by the Chamber of Digital Commerce in the continuing legal battle between the SEC (United States Securities Exchange) and Telegram.
The document which was filed on January 21st was authored by one Lilya Tessler, the current head of Sidley Austin LLP, based in New York, and counsel to the Chamber.
An amicus brief is a legitimate paper that enables a non-litigant to provide their opinion or expertise in an ongoing case. Lilya states that the Chamber was interested in providing arguments on how the U.S District for the Southern District of New York ought to consider crypto assets.
Established in 2014, the Chamber is a not for profit organization that seeks to promote the use of crypto assets and any other technology based on blockchain infrastructure. The Chamber, as part of its undertaking, has been able to create numerous crypto and blockchain-related advocacy groups such as the Token Alliance and the Blockchain Alliance.
Digital Chamber of Commerce Asks for Clarity Pertaining to Investment Contracts
Taking into account the position they have taken on blockchain technology, the Chamber insisted that it was not looking to state whether the $1.7 billion Gram token sales could be considered a securities transaction.
Rather, it was interested in ensuring that there was enough transparency when it came to regulations pertaining to cryptocurrencies. It went on to state that:
“Although the Chamber does not have a 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.”
The Chamber then went on to ask the court to try and define what a digital asset was, in reference to investment contracts, and the securities transactions which may have been associated with it. According to the association, there were two approaches to making an analysis regarding the issue at hand, including determining whether such a commodity could be offloaded in a normal commercial transaction.
The Blockchain Association Also Files Amicus Brief In Favor of Telegram's GRAM
Not only did Chamber of Digital Commerce step up to provide insight into the case, but The Blockchain Association (which includes industry giants like Coinbase, Ripple, Circle, and more) to provide third party perspective to the judge. Also filed on Jan 21st, stating:
“The SEC’s lawsuit also raises novel questions regarding whether companies are forbidden from raising funds from sophisticated U.S. investors, under well-established regulatory provisions, to build blockchain networks.”
“The Court’s answers to these questions will influence companies’ decisions about whether to introduce blockchain products, investors’ decisions about whether to support this new technology, and innovators’ decisions about whether to base their companies in the U.S. or abroad. Before filing this action, the SEC had provided no clear rules regarding these questions. And what little guidance it had offered differs drastically from both existing law and its position in this case.”
As you can see from the statement above, the Blockchain Association wants the court to carefully consider the actions presented as they will have lasting impacts on not only Telegram but past and future endeavors.
“The Court’s decision regarding whether Grams themselves were securities at the time of the Purchase Agreement (before Grams even existed) could have far-reaching effects throughout the industry.”
The Blockchain Association and the Chamber of Digital Commerce are both saying that the fault lies at the hands of the regulations put in place. They are not adequate and up-to-date enough to deal with today's technology innovations as many people feel the same about their stance on Tax regulations. The Association went on to say:
“The Court should not block a long-planned, highly anticipated product launch by interfering with a contract between sophisticated private parties. Doing so would needlessly harm the investors that securities laws were designed to protect.”
What are your thoughts on the case? Are the two amicus briefs that were filed yesterday correct in saying that the courts shouldn't tread lightly. Or do you feel this is a clear case of securities violations?