Telegram Asks Court to Dismiss SEC Allegations Against Gram Cryptocurrency
Telegram has asked the court to dismiss the US SEC Allegations Against Gram Cryptocurrency. After the trial, Telegram postponed the launch of its cryptocurrency Gram to April of the next year.
13 November 2019, AtoZMarkets – The messaging giant Telegram has asked the court to drop the lawsuit filed by the US SEC on its cryptocurrency Gram. In a recent filing in the Southern District of New York on Tuesday, Telegram refuted all allegations made by the US SEC in its trial last month. Previously, the US SEC had obtained a court emergency restraining order to stop the issuance of Gram cryptocurrency.
The SEC alleged that Telegram’s ICO was illegal
Just two weeks before Telegram was supposed to issue Gram cryptocurrency to its investors. The SEC obtained a court order to prevent Telegram from doing so. In its lawsuit, the SEC alleged that the messaging company had made an illegal distribution of unregistered securities. But in recent, the messaging app company has refuted all allegations made by the US SEC.
Telegram also challenges this position in the filing. It also claims that the SEC engaged in inappropriate regulation by enforcement in this emerging area of law. It did not provide clear guidance and advice on the conduct that constitutes a violation of federal securities laws. And it has now adopted an ad hoc legal position. That is contrary to the judicial precedent and the opinions publicly expressed by its senior officials.
Telegram added that it had “voluntarily committed” to the SEC for advice on how to avoid violating federal securities laws. Yet, the SEC did not provide guidance before bringing this action into execution. The company reiterated that its gram tokens have not yet been created, stating that if they do, they will be a currency and/or commodity – not securities under federal securities laws.
Telegram admitted that it did not file a registration statement with the SEC because none was, is, or will be required under federal securities laws. As such, the firm has asked the District Court to dismiss the SEC’s application for relief and dismiss the claims with prejudice and order any other action that the court deems and appropriate.
Telegram to issue its cryptocurrency next year
After facing the sudden pursuit, the company gave its investors two choices, either to take back about 77% of their investments or to wait until April 30, 2020, to get the tokens, the majority of investors chose the latter option. Telegram also plans to spend an additional $ 80 million before issuing cryptocurrency. The company had already raised $ 1.7 billion through the ICO.
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