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Telegram Asks Court To Block SEC Action

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Telegram Asks Court To Block SEC Action
Telegram Asks Court To Block SEC Action

Telegram responded to the United States securities regulator, arguing that Gram, the native cryptocurrency for the Telegram Open Network (TON), is not a security.

In an Oct. 16 filing, Telegram urged the United States District Court for the Southern District of New York to deny the U.S. Securities and Exchange Commission’s (SEC) request for a preliminary injunction. Moreover, the firm asked the court to enter an order that maintains the status quo regarding the offer, sale or distribution of Grams. The filing is released two days in advance of Telegram’s ordered deadline to release a counterclaim on Oct. 18, the firm noted in the document.

About the SEC’s recent emergency action against Telegram on Oct. 11, the filing document claims that ”the SEC’s instant application is an ‘emergency’ of its own making.” Reiterating its previous claims, Telegram’s legal council wrote that the firm has been voluntarily engaged with the authority regarding both the TON blockchain and Grams for the past 18 months, but the authority has not provided any clear feedback on the matter. Specifically, Telegram stressed that the authority allegedly decided to do so because Telegram promised to reimburse its investors in case if TON does not launch by Oct. 31. The filing reads:

“Despite the SEC knowing for 18 months that if the TON Blockchain did not launch by October 31, 2019, Telegram would be obligated under its agreements with private purchasers to return the funds it raised, the SEC (i) never requested that Telegram delay the launch of the TON Blockchain; (ii) never advised Telegram of its intention to seek injunctive relief; and (iii) waited until the eleventh hour to file an ex parte application to enjoin Telegram’s launch.”

In the document, Telegram pushed back the U.S. securities regulator by claiming that its Gram token is not a security. The firm emphasized that Telegram already treated the Private Placement as a securities offering according to valid exemptions to registration under the Securities Act of 1933. Once the TON blockchain launches, the grams will merely be a currency or commodity like gold or silver, but not a security, the firm wrote.

Telegram also considered the ambiguity of Gram’s connection with initial coin offering (ICO) products, stating that Telegram has never issued a security to the public through an ICO. Telegram explained that instead of doing an ICO-like product, the firm entered into private purchase agreements with a limited number of purchasers that provided the future payment of Gram currency. The firm wrote:

“Unlike other digital assets that were offered to the general public through so-called Initial Coin Offerings (“ICOs”), Telegram did not — and will never — offer any securities to the public through an ICO.”

While informing that court that Telegram has decided to delay the launch of the TON blockchain, the firm concluded that there is no need for the Court to enter a preliminary injunction in the filing. As reported, in addition to declaring Gram token illegal, the SEC also issued a temporary restraining order on the issuance of Gram tokens, with a court hearing scheduled for Oct. 24.

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Bank of Japan Governor Announces Investigation into Digital Currencies

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Bank of Japan Governor Announces Investigation into Digital Currencies

Bank of Japan (BoJ) governor Haruhiko Kuroda has announced that the country’s central bank is conducting research into digital currencies.

According to a report published Nov. 19 by Reuters, Japan’s central bank has taken interest in the development of digital currency and is actively researching the technology. The news comes in the wake of China’s high-profile central bank currency, which is rumored to launch before the end of the year.

While Kuroda said the central bank has no intention to issue a digital currency in the short-term, it is researching the technology for potential implementation in the future.

Kuroda also warned against the launch of stablecoins without proper governance and risk management protocols in place. He told parliament on Tuesday,

If stable coins backed by companies with a huge customer base are issued globally, that could have an impact on monetary policy and financial system stability.

Kuroda is the latest central bank governor to weigh in on digital currencies and stablecoins, following the global regulatory storm created by Facebook’s libra.

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Bank of America to terminate VC’s account; crypto-community reacts

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Bank of America to terminate VC’s account; crypto-community reacts

Authorities in the United States have been deliberating on regulations for cryptocurrencies and its technology for quite a while now. On the other end of the spectrum, many countries such as China are nearly ready with their own cryptocurrency. In yet another case that might be highlighting the mainstream banking system’s distaste for cryptocurrencies, the Bank of America, a multinational investment bank and financial services firm, has fired one of its oldest customers, top venture capitalist, Roelof Botha.

The Sequoia Capital partner posted on 18 November,

“After being a customer of @BankofAmerica for 20 years, I received this notice today that they decided to fire me as their customer! With absolutely no explanation….”

Source: Twitter

Source: Twitter

Botha claimed that the bank informed him about terminating his account, without giving any reasons for the same. The Bank has previously been accused of shutting down accounts of various people, including a 3-year-old’s account for being a “risk profile.” According to a report, Tim Enneking alleged that the bank shut down his 3-year-old daughter’s account, alleging her “connection” with crypto.

In the past, several banks across the country have warned cryptocurrency users, telling them that they could face account closures. However, a VC being on the receiving end of such a notice might be a first. Michael Arrington of Arrington XRP Capital and Founder of TechCrunch, responded to the incident and tweeted,

“Bank of America just fired one of the top five venture capitalists in Silicon Valley. My only guess is he bought bitcoin.”

Even though the Bank’s notice did not highlight a specific reason for termination, apart from stating that “a careful review” of the account was done, the crypto-community was quick to react and many reminisced about similar encounters they’ve had with banks such as BoA. Justin Sun, CEO and Founder of the Tron Foundation, responded,

“Me too😂I have been a customer of @BankofAmerica for 8 years and get fired as well🤣

Changpeng Zhao of Binance took the opportunity to quip, “Bitcoin never fires you,” while Arrington spoke about a random instance in 2011 when his own account was shut down by the bank.

“I had a bofa account since I turned 18. In 2011 i made the mistake of paying bills online from a vacation in Mexico. They shut my account and froze funds for weeks.”

Other crypto-personalities pitched in too, with many speculating that crypto-related activities were the reason behind such a termination. However, Mark Jeffrey disagreed, stating,

“That was my first thought as well — but while I’ve heard of banks unbanking companies for crypto, I’ve not heard of them unbanking *individuals* — much less someone as high profile as @roelofbotha. This is new.”

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Maylasian Cash Transaction Limit Set to $6K – Will This Push People Into Crypto?

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Maylasian Cash Transaction Limit Set to $6K - Will This Push People Into Crypto
Maylasian Cash Transaction Limit Set to $6K - Will This Push People Into Crypto?

Malaysia is planning to impose a $6,000 limit on cash transactions in 2020, according to a deputy governor at the country’s central bank. The new restrictions aim to prevent the use of cash in illicit activities, and won’t affect regulated financial institutions or other entities transacting for humanitarian aid purposes.

Abdul Rasheed, the deputy governor in question who works for Bank Negara Malaysia (BNM), claimed that the measures will apply to all transactions involving physical cash, including payments for goods and services, reports local English-language newspaper The Star. The limit of 25,000 Malaysian ringgits ($6,048) will also apply to donations and transfers between entities like people and businesses, the report notes. According to Rasheed, who also serves as chairman at the National Coordination Committee to Counter Money Laundering, most Malaysian households spend around 8,000 ringgits ($1,935) per month. Rasheed also noted that the fines for violating the proposed measures will not exceed three times the amount of the committed offense.

Image result for malaysian currency

Rasheed highlighted the need for a cash transaction limit in the country, given the anonymous nature of cash transactions. In a report by local publication The Edge Media Group, Rasheed said:

“Cash remains widely exposed to abuse by illegal activities. As such, this measure targets large cash transactions that are at higher risk of being abused. This is also not to hinder legitimate cash payments for goods and services — most of which are for small ticket items.”

Citing similar practices adopted by Indonesia, Rasheed expressed his willingness to collect public feedback on the matter. He noted that a public policy usually takes about six months before being imposed. In August 2019, the Australian government introduced a bill that proposed to ban cash transactions over $6,900, including those transactions involving digital currencies. More than 7,000 people subsequently signed a petition against the proposal.

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