Telegram Denies SEC Allegation That GRAM Tokens are Securities

Wilfred Michael 

Wilfred Michael

News reporter

13 November 2019,
21:54
Telegram Denies SEC Allegation That GRAM Tokens are Securities

Telegram has officially asked a U.S court to dismiss allegations brought against the company by the United States Securities and Exchange Commission (SEC) last month.

As Stmarket.co reported in October, the SEC halted Telegram’s planned issuance of GRAM tokens to investors, alleging that the offering that led to the creation of GRAM tokens violated securities laws.

However, Telegram has now denied those allegations stating, among other things, that the company’s “private placement to highly sophisticated, accredited investors was conducted pursuant to valid exemptions to registration under the federal securities laws.”

Telegram also stated in its defense that “Grams will not be securities when they are created at the time of launch on the TON Blockchain,” but will qualify as a “currency and/or commodity — not securities under the federal securities laws.”

Additionally, the company blamed the SEC for only being conscious of enforcing its ‘regulation by enforcement’ when it comes to the nascent area of law concerning the crypto industry.

The SEC has “failed to provide clear guidance and fair notice of its views as to what conduct constitutes a violation of the federal securities laws,” Telegram alleged, even noting that it had “voluntarily engaged” with the regulator in the build-up to its token sales to remain compliant. The complaint, however, says that the SEC was reluctant to help before deciding to enact enforcement action against Telegram.

While the case between the company and the SEC is resolved, Telegram has pleaded with investors who were expecting to receive their Gram tokens at the end of last month to wait until the court “resolves the legal issues at the heart of the matter.”

 

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