Telegram to Ask Court Not to Classify Gram Tokens as Securities During February Hearing: Details

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Sun, 10/20/2019 - 07:20
Alex Dovbnya
The February court hearing is expected to put an end to the legal battle between Telegram and the SEC by determining whether Grams are securities
Telegram to Ask Court Not to Classify Gram Tokens as Securities During February Hearing: Details
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Telegram will ask the court rule against classifying their Gram tokens as securities during the upcoming February hearing, according to a letter to TON investors that was obtained by U.Today. 

As reported by U.Today, Telegram was slated to voice its arguments against the US Securities and Exchange Commission (SEC) on Oct. 24. However, a new court filing shows that the hearing has been postponed to Feb. 18-19, 2020.

IT IS ORDERED that Defendants shall not offer, sell, deliver, or distribute “Grams” toany person or entity, until the conclusion of the hearing scheduled by the Court for February 18and 19, 2020 (“Hearing”), except upon further order of the Court or agreement of the parties.

The Telegram team states that the hearing that is scheduled to take place in February is fundamentally different from the one that was supposed to happen in October. Telegram expected the court to put an end to the ongoing dispute by ruling on the "core arguments" that their Gram token is not a security. 

The October 24 hearing, in contrast, was only to consider whether a delay should have been mandated, without conclusively resolving the core argument. 

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On Oct. 17, Telegram filed a response to the SEC where it states that its native token "will merely be a currency or a commodity." One day later, the regulatory watchdog asked the court not to reject its request for a preliminary injunction against the Pavel Durov-helmed company, adding that its argument about Grams not being securities wasn't convincing.

Telegram will make sure that its position is presented "as strongly as possible" during the forthcoming hearing. 

The Telegram Open Network (TON) was scheduled to go live by Oct. 31 (otherwise, Telegram would have to return money to its investors). However, the SEC sued the messaging giant for allegedly running an unregistered ICO, which forced the company to delay the launch of its network to Apr. 30, 2020 while trying to cut a deal with its investors. 

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.