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Not entirely sure why the SEC even has jurisdiction here ... isn't Telegram based outside of the US? And even if they decide they do have jurisdiction, how are

Not entirely sure why the SEC even has jurisdiction here ... isn't Telegram based outside of the US? And even if they decide they do have jurisdiction, how are they going to enforce anything?

dathinab 7y ago
It would affect US buyers or more concrete re-sellers of Gram tokens. Given that you normally buy this kind of tokens to either trade them or keep them as a security you sell when you need money it matters a lot.
- Reelin 7y ago
  Wouldn't it only prevent formal legal entities (ie US companies) from making purchases? End users could trivially purchase via non-US payment services, and I don't see how the US could actually prevent "import" or use of crypto tokens in practice. To me, it seems similar to the way the GDPR claims to apply to entities which don't operate in the EU - good luck enforcing that in practice!
  - deleted 7y ago
    [deleted]
JumpCrisscross 7y ago
> how are they going to enforce anything? Fines and C&Ds. If those court orders are wilfully ignored, it turns into a more serious law enforcement issue. In the meantime, they get locked out of the U.S. dollar capital markets.
- Reelin 7y ago
  Telegram Messenger LLP is (was?) UK based, but it looks like it's being gotten rid of. [1] From the same article: > Telegram Messenger LLP was established in February 2014 by two companies – Dogged Labs Ltd. (British Virgin Islands) and Telegraph Inc. (Belize). In May 2018, however, Dogged Labs was substituted for Telegram Messenger Inc., which is also registered in the British Virgin Islands. How the SEC (or the US in general) intends to undertake effective enforcement action against a cryptocurrency provider operating out of either of those jurisdictions is beyond me. They don't exactly have a physical product whose import you can ban... [1] https://news.bitcoin.com/pavel-durov-closes-uk-based-company-telegram-messenger-llp https://news.bitcoin.com/pavel-durov-closes-uk-based-company...
  - JumpCrisscross 7y ago
    > How the SEC (or the US in general) intends to undertake effective enforcement action against a cryptocurrency provider operating out of either of those jurisdictions If you sell securities to American investors, you’re subject to U.S. securities law. This is true for practically every financial market. As for exerting influence, I can’t think of many easier foreign jurisdictions for U.S. law enforcement to get its way in than BVI, particularly post-Brexit.
    - Reelin 7y ago
      I'd quibble that it's your customers that fall under American jurisdiction, and that in order to retain them you voluntarily choose to adhere to the applicable regulations. Naturally US companies wouldn't be legally permitted to purchase their tokens, but other than using that as a form of coercion I don't see how enforcement could be achieved. Regarding BVI, I'm admittedly not familiar with them or their legal system. Do they have financial enforcement agreements (or some other arrangement) in place with the US?
      - JumpCrisscross 7y ago
        > you voluntarily choose to adhere to the applicable regulations This is a fine philosophical argument. But practically, it isn’t how any financial laws work. (To illustrate why, imagine an American fraudster selling Ponzi schemes to Germans. Would it make any sense to say the fraudster is beyond German law? Of course not.) > Do they have financial enforcement agreements (or some other arrangement) in place with the US? BVI is a British Overseas Territory. It’s a common Europe-U.S. linkage. If they ignore U.S. court orders, everything from asset freezing and seizure to extradition is on the table.
        Reelin 7y ago
        > Would it make any sense to say the fraudster is beyond German law? Of course not But this is only the case because the US has agreements in place with Germany (and the EU more generally I think?). Were the fraudster located in a less "friendly" territory, they might indeed be beyond reach. For example, I don't generally expect Russia to be cooperative in extraditing anyone to the US anytime soon. As to British Overseas Territories, the Wikipedia page wasn't particularly enlightening as to what legal arrangements might currently be in place. I'll take your word that a relevant framework exists. As such, I do wonder how Telegram is planning to navigate this.

Not entirely sure why the SEC even has jurisdiction here ... isn't Telegram based outside of the US? And even if they decide they do have jurisdiction, how are they going to enforce anything?

dathinab 7y ago

It would affect US buyers or more concrete re-sellers of Gram tokens. Given that you normally buy this kind of tokens to either trade them or keep them as a security you sell when you need money it matters a lot.

Reelin 7y ago
Wouldn't it only prevent formal legal entities (ie US companies) from making purchases? End users could trivially purchase via non-US payment services, and I don't see how the US could actually prevent "import" or use of crypto tokens in practice. To me, it seems similar to the way the GDPR claims to apply to entities which don't operate in the EU - good luck enforcing that in practice!
- deleted 7y ago
  [deleted]

JumpCrisscross 7y ago

> how are they going to enforce anything? Fines and C&Ds. If those court orders are wilfully ignored, it turns into a more serious law enforcement issue. In the meantime, they get locked out of the U.S. dollar capital markets.

Reelin 7y ago
Telegram Messenger LLP is (was?) UK based, but it looks like it's being gotten rid of. [1] From the same article: > Telegram Messenger LLP was established in February 2014 by two companies – Dogged Labs Ltd. (British Virgin Islands) and Telegraph Inc. (Belize). In May 2018, however, Dogged Labs was substituted for Telegram Messenger Inc., which is also registered in the British Virgin Islands. How the SEC (or the US in general) intends to undertake effective enforcement action against a cryptocurrency provider operating out of either of those jurisdictions is beyond me. They don't exactly have a physical product whose import you can ban... [1] https://news.bitcoin.com/pavel-durov-closes-uk-based-company-telegram-messenger-llp https://news.bitcoin.com/pavel-durov-closes-uk-based-company...
- JumpCrisscross 7y ago
  > How the SEC (or the US in general) intends to undertake effective enforcement action against a cryptocurrency provider operating out of either of those jurisdictions If you sell securities to American investors, you’re subject to U.S. securities law. This is true for practically every financial market. As for exerting influence, I can’t think of many easier foreign jurisdictions for U.S. law enforcement to get its way in than BVI, particularly post-Brexit.
  - Reelin 7y ago
    I'd quibble that it's your customers that fall under American jurisdiction, and that in order to retain them you voluntarily choose to adhere to the applicable regulations. Naturally US companies wouldn't be legally permitted to purchase their tokens, but other than using that as a form of coercion I don't see how enforcement could be achieved. Regarding BVI, I'm admittedly not familiar with them or their legal system. Do they have financial enforcement agreements (or some other arrangement) in place with the US?
    - JumpCrisscross 7y ago
      > you voluntarily choose to adhere to the applicable regulations This is a fine philosophical argument. But practically, it isn’t how any financial laws work. (To illustrate why, imagine an American fraudster selling Ponzi schemes to Germans. Would it make any sense to say the fraudster is beyond German law? Of course not.) > Do they have financial enforcement agreements (or some other arrangement) in place with the US? BVI is a British Overseas Territory. It’s a common Europe-U.S. linkage. If they ignore U.S. court orders, everything from asset freezing and seizure to extradition is on the table.
      - Reelin 7y ago
        > Would it make any sense to say the fraudster is beyond German law? Of course not But this is only the case because the US has agreements in place with Germany (and the EU more generally I think?). Were the fraudster located in a less "friendly" territory, they might indeed be beyond reach. For example, I don't generally expect Russia to be cooperative in extraditing anyone to the US anytime soon. As to British Overseas Territories, the Wikipedia page wasn't particularly enlightening as to what legal arrangements might currently be in place. I'll take your word that a relevant framework exists. As such, I do wonder how Telegram is planning to navigate this.