Telegram Asks Court to Dismiss SEC Lawsuit in New Filing
- In the filing the messaging app firm has refuted all allegations made by the SEC that its token is a security.
- The firm further accused the U.S. regulator of engaging in “improper ‘regulation by enforcement’ in this nascent area of the law”.
Emblem of the U.S. Securities and Exchange Commission in Washington, DC on November 26, 2016. Mark Van Scyoc/Shutterstock
Telegram has asked a U.S. court to drop the action brought by the United States Securities and Exchange Commission (SEC) that alleges that its token is a security, according to a new filling from 12 November.
According to the document filed to the New York Southern District Court, Telegram accuses the SEC of abandoning just practice in its criticisms.
The messaging app firm further refuted all allegations made by the regulator last month, which claimed that it was engaging in the sale of unregistered securities when it sold its Gram (GRM) tokens to vetted investors.
The filing claims that the SEC:
“Engaged in improper ‘regulation by enforcement’ in this nascent area of the law, failed to provide clear guidance and fair notice of its views as to what conduct constitutes a violation of the federal securities laws, and has now adopted an ad hoc legal position that is contrary to judicial precedent and the publicly expressed views of its own high-ranking officials.”
In the beginning of October, the U.S. SEC obtained a temporary restraining order against the Telegram Group and the Telegram Open Network (TON), which aimed to stop the company from selling and distributing the GRM token in the U.S..
Before the SEC gained the restraining order, Telegram was planing to launch its Telegram Open Network (TON) in late October.
The next court hearing, to determine if the GRM token is a security, is scheduled for 18-19 February 2020. It was previously planned for 24 October, but was postponed as to allow both parties time for discovery in the case.
After winning its investors support, Telegram has decided to delay the launch of its network to 30 April 2020.
- Popular Telegram bot Unibot, which is used to snipe trades on Uniswap, became a victim of a token approval exploit earlier today, when it was switching to a new router.
- After confirming the exploit, Unibot assured users that their keys and wallets were safe, and that the project will compensate all affected users.
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- The U.S. SEC, CFTC, and FTC have all filed separate lawsuits against bankrupt crypto lender Celsius and its former CEO Alex Mashinsky, charging them with multiple counts of fraud.
- Mashinsky was also arrested in New York on Thursday, and later charged by the Department of Justice with securities fraud, commodities fraud, and wire fraud.
- The U.S. regulator has alleged that the platforms offered unregistered securities to the general pubic in the form of the BNB token and BUSD stablecoin.
- Binance was also accused of failing to register as an exchange, and that it had comingled funds between its global and U.S. platforms.