Telegram has submitted a new legal filing requesting that the New York Southern District Court dismiss accusations by the U.S. Securities and Exchange Commission (SEC) that its cryptocurrency is a security.
In October, the company’s hearing with the SEC was postponed until February 2020. The judge hearing the case, P. Kevin Castel, ruled that Telegram should not distribute its tokens until the court makes its decision on the case. Telegram had already agreed not to launch its TON blockchain project and gram issuance until April 30, 2020, offering investors 77 percent of their funds back if they disagree with the delay. So far, investors have rejected taking a refund.
In its latest filing, Telegram accuses the SEC of engaging “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 other news, Kik is also facing a legal battle with the SEC over its $100 million initial coin offering (ICO).
The company’s legal team tried to persuade the district court of the Southern District of New York that the SEC’s case was void because the legal definition of an “investment contract” is unclear. Not surprisingly, the SEC opposed that argument.
“This defense asserts that, notwithstanding 70-plus years of well-settled jurisprudence, the term ‘investment contract’ in the securities laws is void for vagueness as applied to Kik’s investment scheme. This claim is untenable and should be dismissed,” the agency said.
The judge agreed with the SEC, denying Kik’s motion for discovery.
And HSBC Singapore announced that it is partnering with Singapore Exchange (“SGX”) and Temasek on a pilot to explore the use of distributed ledger technology (DLT) for the issuance and servicing of fixed income securities.
“The potential of DLT is an evolving story, and its role in overcoming inefficiencies in the fixed income market is yet to be seen. Only by collaborating with market participants will we fully understand its actual viability; by partnering with SGX and Temasek, we hope to explore whether digital assets could become a reality,” Tony Cripps, chief executive officer at HSBC Singapore, said in a press release.