A court in the Southern District of New York recognized Gram tokens as securities and forbade transferring them to buyers who acquired IPO rights at the beginning of 2018. A preliminary court decision was made on Tuesday, March 24, and can be appealed.
The court agreed with the position of the US Securities and Exchange Commission (SEC). The court ruling said that based on Howie’s test to determine if something is a security, the SEC has proven that Telegram’s current Gram distribution plan is an offer of securities.
Telegram will suffer critical reputation damage if the TON blockchain is not launched, the court admits. Attracting $1.7 billion, Telegram representatives emphasized their technical competence, and the failure of the new cryptocurrency project will obscure the reputation of Telegram and the Durov brothers, the document says that this will limit the ability to launch new products, attract technical specialists and even raise the capital needed to maintain the messenger Judging by the data presented, the court ruling says that Telegram’s revenues are directly related to the incomes of the initial buyers, which may rise or fall along with the success or failure of the TON blockchain platform.
The SEC believes that the creator of Telegram Pavel Durov knew and understood that buyers would not want to pay $1.7 billion to purchase Gram cryptocurrency simply as a means of storing or transmitting value. Therefore, according to the SEC version, Telegram developed a scheme that would maximize the amount of funds invested by the initial investors and created a structure that allows these buyers to maximize the benefits that they receive when they resell their tokens in open markets.
The blockchain platform Telegram Open Network (TON) was conceived by Pavel Durov as a global ecosystem with its own cryptocurrency (Gram), which can be used to pay for goods and services. For the first time, it became known about TON in January 2018 from the white paper of the project, which leaked to the network. The launch of TON could take place on October 31, but after the SEC filed a lawsuit against Telegram, Pavel Durov, with the consent of investors, postponed the launch date until the court decision.
Durov hoped that the launch of TON would usher in a new, decentralized economy on the Internet, and Gram would seriously compete with Bitcoin and Ethereum for this, the creators of the platform attracted $1.7 billion of investments from around the world. Famous investors in the TON blockchain platform include Russian entrepreneurs Roman Abramovich, Sergey Solonin and David Yakobashvili, foundations and businessmen from Silicon Valley, Asian entrepreneurs and members of the Durov fan club, such as Hollywood actor Jared Leto.