The U.S. Securities and Exchange Commission opposed Telegram’s request for clarity on the geographic scope of a court injunction that would prevent the company from distributing its Gram (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.”
The Gram tokens correspond to the company’s $1.7 billion initial coin offering that raised money to launch the Open Telegram Network — or TON — in 2018.
SEC Claims Ruling Applies to Any Person or Entity
Attorneys from Telegram filed a letter on March 27 requesting the court to clarify whether the March 24 court injunction has jurisdiction outside the United States.
The letter noted that while the Supreme Court previously acknowledged “a presumption against extraterritorial applications’ of U.S. securities laws.” As such, Telegram seeks to distribute tokens to investors representing the $1.27 billion raised by the firm from outside the U.S.
The SEC describes Telegram’s letter as “procedurally barred and legally meritless”, citing its injunction request, which sought to prevent Telegram from “delivering Grams to any person or entity or taking any other steps to effect any unregistered offer or sale of Grams.”
Despite the firm’s letter being “styled as a request for ‘clarity,’” the SEC asserts that “Telegram’s request is really a motion for reconsideration in disguise.”
TON community may seek to launch network despite court ruling
Judge Castel ruled on March 24 that the SEC had “shown a substantial likelihood of success” in seeking to prove that the token issuance of Telegram would distribute unregistered securities — granting a preliminary injunction against the firm to deliver Gram tokens to the investors. Telegram promptly appealed the ruling of Judge Castel.
Two days later, the TON Community Foundation‘s founder revealed that the community was considering launching the network itself, since the code was open source. TON Spain head Daniel Perez added:
“No one can prevent the launch of TON by any other entity, person or a community, because TON is a decentralized open-source solution. Already, there are two different test networks, and within the community, there is at least 1 group planning to launch the third.”