Telegram has been having its days be troubled, ever since the SEC has centered its crosshairs on the company. After a hearing that stretched into two hours, the New York Federal Judge, P. Kevin Castel, has extended the restraining order that continuously prohibits Telegram from distributing its gram tokens.
Extending Injunction In Light Of Court Case
On the 19th of February, 2020, the US Southern District Court of New York has reserved judgment on the preliminary injunction aimed at Telegram’s Gram sale, having happened in 2019. This initial judgment was requested by none other than the US’s Securities and Exchange Commission, or SEC.
The entire event happened after the SEC concluded that they were convinced that Telegram’s Gram token was a security. Telegram itself claims that Grams are just utility tokens for the upcoming Telegram Open Network (TON), and they’ve been at it ever since. The SEC has subsequently shut down the ICO Telegram had done back in October of last year, with an injunction barring all distribution of Gram coming shortly after that. This injunction was set to expire on the 19th of February, 2020.
Deadlines Being Kept In Mind
Judge Castel has taken steps to reassure Alexander Drylewski, the lawyer of Telegram, that he is keeping the 30th of April deadline the company has, into consideration. One of the major complications for Gram, and an amusing testament to overconfidence, is that Gram promised full refunds should TON fail to launch at a specific deadline. This deadline has already been moved, having been initially October 2019.
Drylewski was forced to agree to the prolonged injunction on the distribution of Grams, due to the Judge saying that the Court would be forced to make an immediate decision if the company rejected it. It seems Telegram is aiming to gather more evidence, and aren’t confident that things are in their favor.
Second Largest ICO In US History
In an amusing twist of fate, even with Telegram’s ICO being barred and the company itself being sued, it boasts the title of second-largest ICO to date. The ICO itself managed to raise approximately $1.7 billion through two token sales, having started back in January 2018. The SEC’s entire claim rests on the fact that Grams are considered securities by US Law, as they claim that Telegram had to first register the tokens with the regulator before the ICO.
Whatever the case may be, this is one of the most noteworthy court cases that has been happening within the US’s crypto industry. The ruling, regardless of what side the Court takes, will doubtlessly set a precedent for upcoming groups, as well.