Judge Orders Telegram Founder/CEO to Testify in SEC Case Regarding Gram Token
- The three individuals that the judge wants to testify include Pavel Durov, Ilya Perekopsky, and Shyam Parekh.
- Though the SEC accuses Telegram of selling unregistered securities, Telegram denies the claims.
Telegram was already a massive social media platform, and they decided to launch a new cryptocurrency asset called the Gram. Unfortunately, its legal status is still being debated, leading to a court case involving the SEC. While the deposition of the case is planned to take place in January, District Judge P. Kevin Castel recently ordered the founder and CEO of Telegram to give testimony for the case.
The deposition, based on the projected date, will end up taking place about a month before Telegram faces the SEC in court, which will be meant to dispute the legal status of their token. Presently, the SEC states that the Gram is an unregistered security.
There are three people that the judge is ordering to testify – CEO/founder Pavel Durov, vice president Ilya Perekopsky, and Shyam Parekh. The three parties are meant to provide their pre-trial testimony. According to reports, Perekopsky is responsible for the communication with their investors, which took place during the pre-sales, bringing in $1.7 billion last year. Parekh, however, is an employee of Telegram, and his name was found on letters that were issued to Telegram investors. The letters were given to the SEC after Telegram was sued, according to an investor. The deposition of Parekh is planned for mid-December.
Telegram was originally sued by the SEC in October, pushing for a stop to the TON blockchain project and for the tokens involved with the investors of the project to be withheld. The SEC stated that Telegram’s actions would result in a flood of unregistered securities reaching the US market, which means that retail investors would have access.
However, despite the allegations from the SEC, Telegram insists that the regulator is wrong, adding that the token sale was registered correctly under Regulation D, and that the token would “merely be a currency or commodity” after it was issued, not a security. Telegram has urged the court to drop the action against them by the SEC in a counterclaim on October 16th, stating that none of the allegations are true.
Telegram stands by the falsehoods of the SEC’s statements, but the platform will be delaying the launch of their project anyway. The launch was originally planned for October, but the new launch date will be in April 2020, allowing the SEC case to be resolved first. The delay was approved by TON investors, who have refused to accept a partial refund.
While the launch date was pushed back, the project has still been making progress, even releasing the TON blockchain nodes’ code in September this year. At the time, the company told investors to create their public keys and to send them in as they await the scheduled distribution. A desktop wallet app was also released for the upcoming tokens, which have been running on a test network in the meantime.
Coinbase and other exchanges have already stated that they are prepared to list grams when they are finally released. Gram Vault, a major custody provider for the Gram, has already filed the necessary paperwork for Poloniex to list the token, according to court documents. The CEO of Binance – Changpeng Zhao – spoke with CoinDesk, stating that he doesn’t think that regulatory action will be any way to stop projects like TON or even Libra from operating.
On February 18th and 19th, the next court hearings in New York will take place.
The full deposition order can be viewed here: Deposition Order