March 28, 2023

New York court blocks Gram token distribution

New York Federal Judge Kevin Castel upheld the position of the US Securities and Exchange Commission (SEC) and blocked the distribution of Gram tokens of the Telegram Open Network (TON) project.

The court ruled that the distribution of these tokensviolates US securities laws. The document emphasizes that investors would not invest $ 1.7 billion in Gram tokens simply to store or transfer funds. Instead, Telegram convinced investors that they could resell tokens and make a profit.

“Given the economic realities in the testHowie, the court believes that the resale of Gram tokens in the secondary market would become an integral part of the sale of securities without mandatory registration, ”the court said.

Gram tokens were offered as part of the “Simpleagreements for future tokens ”(SAFT). It was assumed that the document itself is an investment contract and a security, while tokens are not securities. However, the court ruled otherwise, and this can lead to many other similar decisions in similar cases.

“The court considers that the supply of Gram primaryto buyers who would resell them in the secondary market, would lead to almost inevitable violations, namely the sale of securities without registration. An order to prohibit the distribution of tokens to primary buyers prevents this violation and is appropriate, which means it will be provided, ”concluded Judge Castel.

Currently a token distribution banThe Gram is temporary, but it is an important decision, meaning that the court will eventually enforce a permanent injunction. Telegram may appeal, but only with special permission.

Earlier it was reported that Roman Abramovich and former Russian Minister Mikhail Abyzov participated in the Telegram ICO in 2018.