US Court Tells Telegram and SEC to Focus on ‘Economic Realities’ of Gram Token Sale

A U.S. federal judge says the SEC shouldn’t get hung up on “labels” in determining whether messaging platform Telegram conducted an illegal securities offering. In his first public remarks on the case, Judge P. Kevin Castel of the U.S District Court for the Southern District of New York began Wednesday’s hearing with an opening statement that urged both parties to consider the “economic realities” of the $1.7 billion token sale while recognizing that “disclaimers don’t control” how the court views the asset. Castel also asked about Telegram’s economic justification for…

Enigma Settles with SEC, Agrees to Refund ENG Investors

Enigma, a startup developing private smart contracts, settled charges with the Securities Exchange Commission for selling its ENG tokens as unregistered securities. Enigma Faces SEC Enforcement Enigma raised $45 million during its 2017 ICO. The startup did not register its ENG tokens as securities, nor did the ICO qualify for an exemption, said an official press release. The San Francisco and Israel-based startup agreed to pay a $500,000 penalty, return funds to investors via a claims process, register its tokens as securities, and file periodic reports with the SEC. “This…

ICO Project Enigma Settles SEC Charges Over $45M Token Sale

The U.S. Securities and Exchange Commission (SEC) has settled securities law violation charges with Enigma MPC, a blockchain startup which raised $45 million in a 2017 token sale. The regulator announced Wednesday that under the settlement, Enigma will refund “harmed investors” using a claims process, register its tokens as securities with the SEC, file reports to the agency and pay a further $500,000 as a penalty. Enigma sold ENG tokens in 2017, which the SEC said are securities. Engima did not qualify for an exemption from securities registration requirements, according…

CFTC Letter Provides Little Clarity in Telegram’s Battle With SEC

Another United States regulatory agency has weighed in on Telegram’s ongoing legal battle with the Securities Exchange Commission. Following a request by the New York Southern District Court, a division at the Commodity Futures Trading Commission (CFTC) has filed a letter with the court on Feb. 18, expressing its views on the complicated case involving Telegram’s digital currency Gram. CFTC says digital currency is a commodity According to the letter, the CFTC’s stance on the case is “relatively straightforward” and stipulates that a “digital currency is a commodity.” Submitted by…

Telegram Developers Jump to TON’s Defense in SEC Case

A group of Telegram Open Network (TON) developers, calling themselves “The TON Community Foundation,” have submitted a court document criticizing the SEC’s prosecution of the project. The former messaging app turned blockchain developer has been embroiled in a long-running suit with the United States Securities and Exchanges Commission, which alleges that US$1.7 billion raised from the sale of ‘Gram’ tokens between January and March 2018 should have been registered with the authority because the tokens constitute a security. Telegram has consistently denied the accusations and has recently been backed up…

TON Devs Worldwide Join Forces to Intervene in SEC Case Against Telegram

A group of international Telegram Open Network (TON) contributors have submitted a court document criticizing United States regulators’ line of attack against the project.  The group has formed a non-profit association, “The TON Community Foundation,” and collectively submitted the brief on Feb. 14 in the form of an amicus curiae. An amicus curiae is a brief that offers expertise or insight into a given case on behalf of an entity that is not formally party to the case itself — i.e. an entity that is neither a plaintiff, defendant, nor…

TON Developers, Investors Back Telegram in SEC Fight

Undeterred by the U.S. Securities and Exchange Commission (SEC)’s lawsuit against Telegram, developers and investors in the company’s blockchain project have formed a nonprofit for community governance. One of the TON Community Foundation’s first actions was to defend Telegram in the case, filing a friend of the court brief Friday in the U.S. District Court of the Southern District of New York.  The brief claims that the “community has about 2,000 active participants,” and “the TON Blockchain is fully operational and could be launched on a 5-second notice.” The reason it…

SEC Charges Ohio Man for $33M Crypto Fraud Targeting Physicians

An Ohio man has been charged by the United States Securities and Exchange Commission for allegedly defrauding 150 investors in a cryptocurrency trading scheme. The SEC’s complaint, filed in federal court in New York on Feb. 11, accuses Michael W. Ackerman of raising at least $33 million in violation of anti-fraud provisions for federal securities laws. Luring investors via a private Facebook group for “Physician Dads” Ackerman’s scam was operated together with two unnamed founding partners, with whom he established the Q3 Trading Club in June 2017. This was followed…

SEC Commissioner CryptoMom Explains Planned ICO Safe Harbor to Cointelegraph

Commissioner Hester Peirce of the United States Securities and Exchange Commission is known for her work on the regulator’s approach to crypto, enough to have earned the moniker “CryptoMom.” On Thursday, Feb. 6, she presented a new proposal looking to build a safe harbor for networks in their infancy seeking to avoid classification as securities. On Feb. 10, Cointelegraph got the chance to speak with the commissioner at greater length about her goals and hopes for the proposal.  What is a safe harbor and why don’t firms want tokens to…