Telegram reacts to SEC's complaint against the company, contending that Gram, the local digital currency for the Telegram Open Network (TON), isn't a security.
As of late, The U.S Securities and Exchange Commission ordered the well known encrypted messaging app- Telegram, to stop the launch of its token in a “crisis” claim. By October 31st, Telegram would have liked to disperse $1.7 billion worth of pre-purchased “Gram” tokens to its investors however due to the order placed by the SEC it had to put a hold to that arrangement.
As per the document in the court, Telegram pushed back the U.S. regulators by asserting that its Gram token isn't a security. The firm underlined the fact that under the Securities Act 1993, previously Private Placement was regarded as a protection offering compliant by Telegram with legitimate exceptions to enrolment. The firm also stated that with the launch of TON blockchain, the grams will just be regarded as cash or product such as gold or silver, yet not a security.
The issue is a significant one for Telegram. The reason the tokens were booked before was because Telegram guaranteed the progress of TON’s blockchain framework. Investors were requested by way of an email for an extension of time for the network to function. An inability to do so by the end of October would qualify for a full refund to its investors. The uncertainty of Gram's association with initial coin offering (ICO) items was considered by Telegram. Telegram expressed that it has never given security to people in general through an ICO. Telegram clarified that the firm went into private purchases as opposed to doing an ICO-like item, with a predetermined number of buyers that gave the future installment for Gram currency.
Telegram, in the filing, requests the court to deny the SEC's complaint, including the SEC's interest for Telegram to present before them its reports and witnesses; also have the court date for both SEC and Telegram to present an expedited case schedule to resolve the legal issues underpinning the SEC’s claims.”
A former SEC counsel – Philip Moustakis said – In the event that Telegram loses in court, it is most likely to face one of two common punishments, one being “disgorgement,” which would constrain the organization to surrender its illegal profits, and the other “rescission,” which would allow speculators to sell their tokens back and recover any misfortunes.