By
Bena Ilyas
May 14th, 2024
Telegram asked the New York Southern District Court to dismiss accusations by the SEC that its GRAM token is a security.
Telegram, the cloud-based encrypted messaging service which helps users to send and receive messages, exchange stickers, videos, photos, audio and all kind of files, has reacted to the lawsuit brought against it by United States regulators which claims that its cryptocurrency, GRAM, is a security. The company has therefore asked the New York Southern District Court to discard the accusations because they hold no water.
Going on the offense with a fresh filing on Nov. 12, the lawyers representing Telegram have accused the U.S Securities and Exchange Commission (SEC) of not observing just practice in criticizing the messaging service company.
SEC Lawsuit Bogus at Best
A while ago, Telegram conducted the sale of GRAM token to a group of vetted investors. This did not go down well with the SEC when they got wind of it, leading to a lawsuit against Telegram, championed by the SEC. The SEC claimed that the token sale was unsanctioned because they are unregistered securities. However, the investors who purchased the GRAM tokens have refused to take back their money despite the pressure.
The fresh filing by Telegram’s lawyers state that the:
“Plaintiff has engaged in improper ‘regulation by enforcement’ in this nascent area of the law, failed to provide clear guidance and fair notice of its views as to what conduct constitutes a violation of the federal securities laws, and has now adopted an ad hoc legal position that is contrary to judicial precedent and the publicly expressed views of its own high-ranking officials.”
The lawyers then requested for a total dissolution of the case against Telegram.
The SEC Is Not Giving Up
The token launch carried out by Telegram has been problematic for the company even though its initial coin offering (ICO) was a success that raised $1.7 billion. However, the last eighteen months have not been a bed of roses for the company as it has been full of hurdles.
As for the SEC, they are never too tired to pursue their claims. Known to fight several battles at the same time, the fight against Telegram is just an example of how relentless the SEC can be in carrying out their duty. The SEC is also at the throat of Kik, a messaging service based in Canada, over the initial coin offering it conducted back in 2017 through which the company realized the sum of $100 million.