Telegram argues that its Gram tokens are not securities and now seek to rebuff SEC’s injunction application.
The filing, which came on October 11 was intended to stop Telegram from distributing Gram tokens. In it, the SEC accused the Telegram of selling unregistered securities. Telegram is now seeking to rebut these accusations against SEC.
Telegram explains why Gram tokens are not securities
On October 16, 2019, the defendants submitted their response, arguing that its Gram tokens are not securities and that SEC’s emergency application for a preliminary injunction is unwarranted.
Telegram response to the SEC https://t.co/y0XdJYdupL— Erik Voorhees (@ErikVoorhees) October 17, 2019
The filing seen by AtoZMarkets explained that Telegram “did not … offer any securities to the public” through an ICO, referencing the $1.7 billion it raised using a Simple Agreement for Future Tokens (SAFT) framework.
“Telegram entered into private purchase agreements with a limited number of highly sophisticated purchasers (the ‘Private Placement’) that provided for the future payment of a currency (grams) but only following the completion and launch of the TON Blockchain.”
According to the Telegram, the Grams tokens, as distinct from the purchase contracts, will merely be a currency or commodity (like gold, silver or sugar) — not a “security” — once the TON Blockchain launches. According to a TRO filing, Telegram should be at a court hearing in New York on October 24.
Telegram is ready to hold off on launching the TON blockchain
As a result, the company has said that it is willing to delay the distribution of the native cryptocurrency until the legal dispute is resolved.
Telegram promised to deliver the Gram tokens to the initial purchasers upon the launch of its blockchain by no later than October 31, 2019. That is the time the purchasers and Telegram will be able to sell billions of Grams into US markets.
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