This week, the Blockchain Association (BA) filed an amicus brief objecting to the SEC’s recent decision to deny Telegram’s issuance appeal. Importantly, the filing represents the raised stakes the GRAM ICO trial poses to the entire industry. The precedents set in this case could have long-lasting ramifications throughout the entire sector. As such, the Blockchain Association felt the need to point out areas in which the SEC acted inconsistently.
Officially, the brief was filed on April 3 with the Second Circuit Court of Appeals. In the report, the Blockchain Association states that regulators made multiple errors during their decision-making process. Primarily, the SEC combined Telegram’s private placement and future sales of blockchain tokens in a manner that is not in line with the usual regulatory requirements.
Blockchain Association Puts Forth a Good Argument
The BA argues that the two steps are “legally and temporally distinct.” BA researchers pointed out that GRAM tokens weren’t in existence at the time of the private placement. Therefore, the process regulators used nullified the purpose of private-placement rules in the first place.
Telegram Spent Big $
The BA cited the huge expenses Telegram incurred during the private placement phase. Importantly, the firm had Regulation D approval from regulators prior to the start of the event. Believing their actions to be regulated, the firm gathered investments from across the globe. Now, regulators are keen on not allowing the firm to fulfill its obligations.
Importantly, on March 30 Judge P. Kevin Castel of the Southern District of New York denied an appeal that would have given Telegram the ability to issue some GRAM tokens to investors. At that time, developers sought to issue GRAMs to all non-US investors. The group believed that the SEC’s focus was on US investor participation. Now, it appears as if regulators want to halt the TON project completely.
The record-breaking Telegram ICO took place in 2018. Impressively, the firm was able to secure $1.7 billion in funding over two phases. At that time, the company expected to distribute GRAM tokens to investors no later than April 30th. Unfortunately, this deadline came and went without a single token issued due to the SEC’s injunction.
The BA entered the sector with the goal to organize a group of industry leaders focused on advocating and promoting American blockchain leadership. Primarily, the group focuses on public policies and their effects on the blockchain sector. To date, the group has advocated and coordinated numerous market groups. Consequently, the BA plays a critical role in the market.
Blockchain Association Sees the Big Picture
The Blockchain Association made the right move when it filed the amicus brief. The precedents set in this trial could deal a death blow to the entire market if more major firms don’t step in and fight for their market needs. Currently, the case has already put into question long-standing exemptions that remain available to all other markets. Hopefully, regulators will cease with the anti-blockchain bias that continues to stifle innovation in the sector.