The court’s hearing on the case of the status of Telegram’s token Gram has been postponed to February 2020.
In what seems to be a continuing series of woes for Telegram and its TON blockchain, the United States District Court for the Southern District of New York has decided to postpone the hearing that will determine if the Grams token is a security or not to the 18th and 19th of February 2020.
Though the company was doing its best to make its token publicly available, the United States Securities and Exchange Commission (SEC) made a couple of moves by dragging the messaging app to court on determining if the Grams token was a security or not.
The SEC’s filing seems to have generated the interest of the Judge handling the case who has ordered Telegram to postpones its issuance of tokens till after determination of the case. The new filing indicates that orders given by the Honorable Justice P. Kevin Castel, have given the App messenger zero leeway in the distribution of grams.
“IT IS ORDERED that Defendants shall not offer, sell, deliver, or distribute “Grams” to any person or entity, until the conclusion of the hearing scheduled by the Court for February 18 and 19, 2020 (“Hearing”), except upon further order of the Court or agreement of the parties”.
“IT IS FURTHER ORDERED that the parties, and any person or entity acting at the direction or on behalf of either or both of them, shall take all reasonable steps not to destroy, alter, or conceal any documents, books, and records, that are in their possession, custody, or control and are relevant to the allegations in the Complaint,”it was added as well among other provisions.
This further tightens any loopholes which might have existed if Telegram allegedly had something to hide. It also further goes to show the Government’s mistrust for blockchain technology as well. Moreover, it indicates that cryptocurrencies and their underlying technologies have a long way to go before adoption by the mainstream is possible.
In what may seem as extremely harsh moves a la carte the orders given by the Judge, there are many underlying reasons that the judge may have been this harsh. Mistrust being the first. The fact that Telegram is a direct competitor to homegrown WhatsApp may be a far-fetched second. Thirdly, the SEC has been known to be quite unpredictable in the way it handles cryptocurrency tokens and their organizations.
These haven’t fazed the Telegram management however as they have indicated to investors that although the date of launch has been postponed if there is a majority disaffection with the postponement of Grams launch, about 77% of investors’ monies will be refunded. The existence of a Force Majeure clause made available on the 14th of October, however, may make that practically impossible sources indicate.
The new proposed date of launch is April 30th, 2020 and investors have up till October 23rd to accept the date change.