New York judge Kevin Castel says Telegram’s TON grams are titles. But Kristin Smith of the Blockchain Association (BA) explained that Grams only comes under the security name without being a title. BA filed the letter of support in court earlier this week.
In a recent interview with Coindesk, the executive director of the Blockchain Association, Kristin Smith, said that all was not lost for the Durov brothers. She believes that the Telegram team has made an offer according to the financial advice of American regulators (including the SEC). According to Kristin, the outcome of the case is useful for putting pressure on Congress over blockchain deals:
“I think the outcome of this case can help put pressure on Congress to write new law that would lead the way.”
She adds that there are three ways to get the appropriate blockchain legislation from the U.S. government:
“We hope that instead of clarifying court decisions, the SEC through the rule-making process or Congress through legislation, will offer a very clear path for the development and launch of such projects…
… There will be an appetite among lawmakers to find ways to support innovations and growing industries as the recovery approaches, and I think we will see positive legislation when that happens. When there are national and international challenges like the coronavirus, it is ultimately innovation that helps lift the economy out of the crisis and revive it. “
It should be noted that the traditional banking system has some flaws, such as huge fees or long wait times for regular payments. Especially when it comes to cross-border payments. Salvation comes as soon as legitimate blockchain solutions come in, say blockchain adherents.
The “Not a Flamethrower” Argument Didn’t Work with Castel JA
New York District Court judge Kevin Castel has twice refused to grant Telegram the right to distribute tokens to early investors. The judge said that even investors from other countries cannot buy, sell and hold the grams of TON. The Blockchain Association took its first steps in the battle in early January. Pretend that TON ICO only looked at the supply of securities, but in fact – this is not the case.
BA’s Kristin Smith says that Telegram’s lawyers strictly followed the regulator’s advice. The Association then asked Judge Castel to dismiss the SEC’s angry allegations against TON.
Despite peaceful rhetoric, the Association did not reach a consensus with the judge. More than that, he strengthened his position. This is to hinder the smooth launch of TON around the world, not just in the United States, and to empower the Durov brothers.
The problem is that tiny details prevent the gram of TON from meeting the definition of the security token.
When Elon Musk sold Not a flamethrower from his boring company, they must have written this in the mailing statement: “Not a flamethrower”. Although it looks like a flame thrower and produces fire, the device lacks power characteristics to be classified as a lethal weapon. However, it looks exactly like a full flame thrower. This is why many international customs workers had questions. The people who received the shipment from America had to explain.
Titans Fighting: Telegram and SEC could destroy the reputation of the SAFT model
SAFT is the development of the legislative framework useful for institutional investors and blockchain companies. The crypto industry believed that such a model perfectly matches (and improves upon) the classic token issuance model. It has all the means necessary to allow institutional capital to circulate in the symbolic economy. The frame does not fit well when it comes to the classic ICO model. There, token issuers often sell the tokens to retail investors, not to VCs. The SEC did not admire or interrupt the frame, remaining silent at the start of the case.
According to Benjamin Beaton of the law firm Squire Patton Bogs, the blockchain companies were trying to adapt their projects to SAFT. But the case against Telegram shows that the SEC must issue statements regarding the use of the model.
“Not all SAFTs are designed in exactly the same way and just because it doesn’t work for Telegram doesn’t mean it won’t work in other areas. SAFT will survive in some form, but developers and investors will really watch SAFT very carefully before deciding to move forward, “said Benjamin.
Jeff Fawkes is a seasoned investment professional and crypto analyst. He has a double degree in business administration and creative writing and is passionate about the impact of technology on our society.