Blockchain Association’s Amicus Brief: A Push for Clarity in SEC vs. Telegram Saga

What’s Brewing in the Courts?

The Blockchain Association has jumped into the fray with an amicus curiae brief, a legal way of saying “Hey court, we’re not involved, but we think you should hear us out.” This all went down on January 21 in the Southern District of New York, amidst the raging storm of litigation that the SEC has whipped up against the encrypted messaging app, Telegram.

Context: The SEC’s Stand Against Telegram

Back in October 2019, the SEC waved its regulatory wand and accused Telegram of attempting to make an unregistered offering with its shiny new token, Grams (GRM). They had their sights set on stopping Telegram from delivering these tokens to its eager investors. But, oh boy, the Blockchain Association begs to differ.

SEC’s Lack of Clarity: A Cry for Help

According to the Blockchain Association’s brief, the SEC has been as clear as mud regarding what constitutes a digital asset as a security. Their letter paints the court’s upcoming ruling as a potentially thunderous earthquake—one that could send shockwaves through the entire blockchain industry. In their words:

“The SEC has acknowledged that at least some digital assets are not securities… Nothing in this case calls for a broader ruling that digital assets are always or presumptively deemed securities.”

Defending Telegram’s Funding Model

The Blockchain Association passionately defends Telegram’s funding strategy, arguing that it’s fully compliant with U.S. laws. They see the SEC’s attack as a bit, well, bizarre, claiming it’s like criticizing a chef for following a recipe. They wrote:

“The funding model at issue both complies with the securities laws and addresses the policy concerns underlying those laws.”

They emphasize that blocking the product launch would throw a spanner in the works for investors, who should be at the center of regulatory intent.

Joining Forces: The Chamber of Digital Commerce

In a show of solidarity (because who doesn’t love a good team-up?), the Chamber of Digital Commerce also filed an amicus brief on the same day. They’re not out to prove whether Telegram’s $1.7 billion Gram token sale fit the mold of a securities transaction, but rather to shine a light on the murky waters of digital asset regulations.

They’re calling for clarity, urging the court to make a distinction between digital assets and the securities transactions associated with them.

Token Tango: Liquid Exchange’s Moves

While all this courtroom drama unfolds, Liquid Exchange has taken a step back, canceling the sale of Gram tokens. With the TON mainnet launch being delayed, they chose to refund all investors who’d thrown their hats in the ring. Talk about dodging a bullet! Talk about keeping investors happy too!