March 5, 2021

Cryptocurrency Gram is not a security, employees say Telegram

Cryptocurrency Gram is not a security, employees say Telegram

Telegram Group sent an official answer against a lawsuit filed against the firm by the Commission US Securities (SEC). Representatives of the messenger did not admit allegations of illegal trading in securities.

The document states that the Gram cryptocurrency is notis a security, so Telegram had the right to sell tokens without a license to trade in securities. The lawyers of the company claim that the SEC’s decision to file a lawsuit came as a surprise to them, because Telegram experts had previously consulted with experts of the Commission on the issue of conducting an ICO Gram in accordance with applicable federal law.

Telegram lawyers drew the attention of the court to thatthe fact that the US agency has not yet developed clear rules for regulating such virtual currencies as Gram, and has not taken steps to suppress ICO tokens during its holding. In January 2018, the company held the first round of private sale of coins and attracted $ 850 million from a group of large investors, concluding an asset purchase agreement with them, which states that Telegram undertakes to issue tokens after the launch of the TON blockchain. In March, the messenger completed the second round of ICO and received another $ 850 million under the same conditions.

In 2017 and 2018, SEC members publicly announcedthe fact that the TON project complies with the requirements of the law and does not violate the rules of the securities regulatory act. In addition, the blockchain startup is a new business model that cannot fit the definition of a security. Telegram representatives believe that the developed digital asset analysis system, based on 38 characteristics, is not suitable for evaluating cryptocurrencies for its compliance with the term “security”, because it does not include instructions for practical use.

Given the unfounded claims,Telegram representatives ask the court to dismiss the lawsuit, withdraw all charges from the company and prohibit the re-filing of a similar complaint. Recall that due to the lawsuit, the company had to postpone the opening of the TON network until April 30, 2020. Most investors supported this initiative and abandoned the requirement for a return on investment.