Telegram Set to Defend its $1.7 Billion TON Token Sale Against The SEC Today
Telegram has one week left to reveal all significant financial information pertaining to its controversial $1.7 billion TON token sale. The company found itself at a crossroads with the SEC, which convinced a South New York District Judge for a favorable ruling.
According to the January ruling, the privacy messaging-oriented firm was given a month to have submitted its bank statements to the SEC. With the deadline ending today, both Telegram and the SEC should be prepared to put up strong arguments that will become a historic event in the regulation of crypto assets.
So far, the latter seems to have an upper hand with information being provided by Singapore’s Central Bank and major stakeholders that facilitated the Gram vault. They include Poloniex and Bittrex crypto exchanges.
The U.S regulator accused Telegram of offering tokens as unregistered securities set to operate on the platform’s upcoming blockchain. In response to the court filings, Telegram told the SEC that it would pause TON’s developments until everything was sorted out legally.
Blockchain Stakeholders File Amicus Brief to Save Telegram
Following the developments of SEC’s filings against TON, The Blockchain Association and Chamber of Digital Commerce filed for an Amicus brief in the ongoing case. The two forces in blockchain tech development are seeking to give opinions and get some answers.
This Jan 21st filing requests the court to be keen in considering a way forward for both investor acquisition and recognition of security tokens pre & post-sale. The Blockchain Association was of the opinion that this case should be resolved quickly;
“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 the Outcome Means for Security Tokens
The ruling of Telegram’s alleged violation of security laws is an event that has been followed closely by blockchain and crypto enthusiasts. An outcome in favor of the SEC would give the regulator more power to crack down on token-based start-ups raising funds in the market.
Telegram, on the other hand, will continue with the launch of its blockchain network if the odds favor them. The TON tokens will also be legally accepted based on the Simple Agreement for Future Tokens (SAFT); this is definitely Telegram’s preferred outcome. In the worst-case scenario, the firm might be forced to reimburse the $1.7 billion raised during its token sale.
Another question that needs to be explored: How will SEC Commissioner Hester Peirce (CryptoMom)'s safe harbor proposal affect cases like this?