Court Bans Telegram from Issuing Gram Tokens outside U.S. Either

Court Bans Telegram from Issuing Gram Tokens outside U.S. Either

The New York court’s order prohibiting Telegram from issuing its Gram tokens includes all entities inside and outside the U.S., Cointelegraph website reported.

In response to the request of the instant messaging service provider to clarify the court’s injection dated 24 March, U.S. District Judge P. Kevin Castel denied the firm’s move to distribute Grams to overseas investors in its 2018 initial public offering (ICO).

The company managed to raise nearly $1.27 billion from foreign investors to finance the development of its project Telegram Open Network (TON).

Court rules in favor of SEC

The court accepted the claim filed by the U.S. Securities and Exchange Commission (SEC). Castel said the company has not argued against the application of the court injunction. He indicated that the court order which bans Telegram from issuing Gram tokens had been known to the company since October of last year.    

Court rejects company’s appeal

Telegram failed to convince the court that it could “apply safeguards” to prevent the U.S.-based investors from accessing its Grams.

The judge indicated that the messaging service firm could not clarify how the safeguards would include legal amendments to its Gram Purchase Agreements.

The court said:

“The TON Blockchain was designed and is intended to grant anonymity to those who purchase or sell Grams.”

 “Any restriction as to whom a foreign Initial Purchaser could resell Grams would be of doubtful real-world enforceability,” the court asserts.

Cryptolydian earlier reported that the market regulator opposed Telegram’s request for clarity on the geographic scope of a court injunction that would prevent the company from distributing its Gram tokens.

In a letter dated 30 March to Judge Castel, the SEC affirms that the injunction “unambiguously and properly applies to the delivery of Grams by Telegram to ‘any person or entity’ and requires no clarification.”

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.