brief thread on Telegram's defense to SEC complaint claiming that GRAMs are securities:

Telegram is going for the same as-applied vagueness constitutional law defense as Kik--namely, that U.S. securities regulations / the term "investment contract" are unconstitutionally vague as applied to GRAMs

admits the SAFTs are securities, but sale of SAFTs was done in compliance w/ securities laws pursuant to Rule 506(c) of Regulation D--to accredited investors typically investing $8-10M (wow)

lots of quotes from Clayton, Hinman and Pierce on the mutation doctrine etc., which "have been woefully insufficient to provide Telegram with[...]notice
as to whether its conduct violated federal securities laws, and have led to arbitrary enforcement
efforts..."

cites Warren Davidson's scathing critique and Trump's recent executive order against secret agency law

"The SEC repeatedly failed to clarify Telegram’s regulatory obligations despite Telegram’s stated flexibility and efforts for compliance[...]Grams cannot function as intended — as a medium of exchange — if they are deemed a security. "

"As particularly relevant here, the SEC has not initiated any actions with respect to cryptocurrencies Bitcoin and Ether, which share similar characteristics with Grams."

I think they should've mentioned EOS here too, since EOS tokens are not being treated as securities.

Rehashes loooong history in 2018 Telegram engaging with SEC, not receiving much clarity and offering to make any changes SEC requested (such as Telegram not buying GRAMs so as to comply with Reg M)

Also asserting lack of SEC jurisdiction, but not spending much time on this argument

So, that's it: the defense mainly rests on constitutional vagueness doctrine & some reasonable arguments that GRAMs are not securities or that it's unknowable whether they are.

The criticisms leveled against the SEC staff & the confusing way they've provided "guidance" & engaged in inconsistent enforcement are in my opinion both totally fair and highly likely to be legally irrelevant. SEC has broad discretion & U.S. securities laws are fuzzy on purpose.

Overall, this is a much better "test case" than Kik (in part because GRAMs are not in the wild yet) and we might get some very interesting judge-made law pursuant to this case. Definitely worth keeping an eye on.

here is Telegram's answer to the SEC's complaint (h/t to Grant Gulovsen) : https://www.courtlistener.com/docket/16325310/37/securities-and-exchange-commission-v-telegram-group-inc/