SEC Commissioner Pierce Blasts Regulator’s Action Against Telegram
SEC Commissioner Hester Pierce said she disagreed with the SEC’s Telegram enforcement action from the start. (CoinDesk archives)
SEC Commissioner Pierce Blasts Regulator’s Action Against Telegram
U.S. Securities and Exchange Commissioner (SEC) Hester Pierce on Tuesday criticized her colleagues’ decision to penalize Telegram’s ICO in remarks that underscored the maverick regulator’s open-arms approach to crypto.
- Pierce, whose liberal fintech stances have earned her the nickname “crypto mom,” told Blockchain Association Singapore that the SEC fundamentally erred in prosecuting and punishing Telegram’s Gram token sale, which raised $1.2 billion in now-forfeited funds for the messaging app as per a settlement last month.
- In her view, Telegram’s decision to sell Grams under a “Simple Agreement for Future Tokens” offering structure should have protected the project from securities violations. But as she pointed out, the SEC saw it differently, and worked to convince a court that the agreements for future Gram tokens counted as securities.
- “I do not support the message that distributing tokens inherently involves a securities transaction. What the SEC’s Telegram complaint cast as evidence of an illegal securities offering—that ‘the project would require ‘numerosity’: a widespread distribution and use of Grams across the globe,’ I see as a necessary prerequisite for any successful blockchain network,” she said.
- She again called for a “safe harbor” that would give certain token projects three years to experiment while regulators retooled their frameworks for what is and is not an investment contract.
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