Telegram has asked a court to clarify exactly what it must do in order to comply with the US Securities and Exchange Commission (SEC) order prohibiting the issuance of its gram tokens. U.S. District Court Judge Kevin Castel in New York issued last week a preliminary injunction in the case banning the issuance and distribution of blockchain TON tokens for the messaging app company.
The judge decided that the SEC “has shown a substantial likelihood of success in proving” that Telegram’s private placement of tokens was an unregistered sale of securities.
Telegram is Still Waiting for Detailed Order
Nevertheless, Telegram is still waiting for a more detailed order to prescribe what exactly it can and can not do as it prepares to launch its blockchain and investors are waiting for their gram tokens to be paid.
In a letter to Judge Castel, Alexander Drylewsky, the company’s lawyer, has asked the court to clarify whether the ban applies to non-U.S. TON Investors. Rough a quarter ($424.5 million) of the $1.7 billion Telegram raised in two rounds in February and March 2018 came from U.S. investors, according to court documents. The rest, argues Telegram, are not subject to US securities legislation.
The company has said it is willing to take steps to fence American investors while still fulfilling their obligations to others.
“Should the Court require, Defendants will implement safeguards to protect against non-U.S. Private Placement purchasers reselling Grams to U.S. purchasers in the future,” the letter reads.
Such measures could include, it adds, a condition that is non-U.S. Investors may receive their grams only if they do not resell them in the U.S., and Telegram may “configure a TON digital wallet to prevent U.S. addresses”.
The company argues that U.S. securities law covers only transactions in securities listed on domestic exchanges and domestic transactions in other securities, so Telegram still holds “irrevocable liability” for its investors in other nations.
Telegram has already notified the court that the preliminary injunction is to be appealed. At the same time, the TON Community Foundation, a group that unites some of the TON investors and developers outside Telegram, announced it was discussing a launch of TON without the participation of Telegram.
Cryptolydian reported that, Telegram seeks to appeal the recent ruling of a US federal court in favor of the Securities and Exchange Commission to stop the distribution of GRAM tokens.