In her July 21 speech to Blockchain Week Singapore, SEC Commissioner Hester Peirce, known in the industry as the ‚CryptoMom‘, spoke about her opposition to the recently concluded SEC lawsuit against Telegram.
SEC action against Telegram did not work for investors
Peirce’s speech, entitled „Not Braking and Breaking“, emphasized the roles and responsibilities of regulators in relation to innovation, especially in light of the Telegram case that ended in June.
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Telegram had sold $1.7 billion in contracts for GRAM tokens, which would be the native token of Telegram Open Network. As a preface, the commissioner explained
„Enforcement actions apply to no one but the individuals who commit irregularities, but are not an appropriate mechanism for creating new laws. Our regulatory integrity requires that compliance actions be based on the violation of a clearly articulated statute or rule.
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A common criticism of SEC actions related to cryptomonies is that they are governed by fines/sanctions, rather than providing clear rules that companies can follow. In addition, Peirce referred to the SEC’s stated mission to protect investors and asked who the closure of Telegram Open Network had served:
„Who did we protect in filing this lawsuit? The initial buyers, who were reputable investors? The members of the public, many of whom are outside the United States, who would have bought the Grams and used them to buy and sell goods and services in the TON Block Chain? Did they really seek protection in the U.S. securities laws? Potential innovators, who will now take additional steps to avoid the United States?“
This seems to be the first time that Peirce has publicly opposed the SEC’s work against Telegram. While discussing his proposal for a regulatory safe haven with the Cointelegraph in February, he declined to comment on the issue, as the SEC had compliance actions underway.
Commissioner Peirce could not be reached for comment at press time.
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Outside your own boundaries
Peirce also highlighted an interesting and ongoing argument about the overall limits of SEC authority. Telegram owner and founder Pavel Durov repeatedly attacked the regulator for trying to dictate global markets. Less dramatically, Peirce suggested that the commission was overstepping its bounds:
„While the United States certainly has the strongest capital markets in the world, and while we work hard to preserve those markets with a fair and efficient regulatory framework, we would do well to remember that our path is not the only one. We must be cautious in calling for solutions that effectively enforce our rules beyond our borders.