Briefing

Telegram blocked from distributing digital coins in victory for U.S. Securities and Exchange Commission

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A federal judge blocked the sale, stating that the SEC had a “substantial likelihood of success” in its case against Telegram for allegedly breaking investor-protection laws when it sold US$1.7 billion in cryptocurrency. (The Wall Street Journal)

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Talking point: Telegram argued its sophisticated venture capitalist backers—including SoftBank Group and Silicon Valley-based Kleiner Perkins Caufield & Byers—made it exempt from oversight. The SEC has devoted much of its cryptocurrency enforcement to relatively small players perpetuating alleged scams. The success in the Telegram action comes one week after Waterloo-based Kik filed a motion asking for summary judgment in the SEC’s case against it. The SEC’s concerns with both Kik and Telegram are based on claims that both are essentially selling securities.