SEC vs Telegram Group Inc: Latest Developments

The SEC just dropped some new docs in New York, revealing more info and claiming that GRAM is definitely a security token. They even mentioned Shyam Parekh, one of Telegram's folks, who told an accountant that an unnamed investor has the right to a whopping 72,835,916.68 Gram tokens. Honestly, it's looking a bit chaotic, but I'm curious to see how Telegram will tackle all these accusations.

I remember reading somewhere that some kind of legal nuance means their token can never be exchanged over, y'know, Telegram. That kind of erases whatever point or advantage there was in the first place.

I am sure that the outcome of this case will have bigger and far-reaching repercussions to the whole cryptocurrency industry as this can be the basis of future judiciary decisions on defining whether a token can be security or not. Telegram has the best opportunity to present all the legal arguments before the court that SEC is wrong on its conclusion that GRAM is a security token and therefore Telegram made legal mistakes in introducing such a digital asset to the public. Honestly, however, I am seeing that eventually the two sides on this legal maneuvering will be settling on a compromise.

The evidence that was recently presented is sufficient to classify GRAM tokens as securities. Employees' use of terms such as "sell gram" is a clear bond for being financial notes. Generally, even if the company hand over bank records to the SEC. I believe that the records are severely incomplete.

Of course, another legal precedence here in the case of SEC vs Telegram. SEC is very clear as to what they define as "security" and pretty obvious that Telegram had made a lot of mistakes and now they are going to pay for it, but either fighting it out in a court case or simply admit there mistakes here and move forward. The evidence is well iron out by SEC here, I don't know how Telegram can legally maneuver here.

So if SEC insist pushing that grams are security tokens but the Gram stipulated on their platform that their tokens served as a utility on their telegram network then they are lying to us? Then if that's the case they arent allowed to list it on major exchanges such as liquid and okex since there are none regulations yet set for security tokens that allowed them to formally listed on market. I know some security tokens but their provisions arent tight unlike this one. The results of the filed case might not favor gram if such accusation is proven and discussed by authority. I am looking forward what action gram will take on this matter.

The problem here is even if Grams have been launched in their TON network I don't see Grams as a mode of payment in any where in the app, making me suspicious of their real purpose for Telegram, the absence of usage for it being a cryptocurrency as a payment only means that it's only function is as a security token which has direct ties with their company. I'm still at a lost though if their token has other functions for a security token such as paying dividends for their holders which I haven't seen an article pointing about that. The document OP provided hasn't even directly classified Grams as some kind of security token but merely an illegal public offering which can be both violated by STOs and also IPOs.

That's why we have this court case now. It's there word against SEC and only litigation like this will tell us who's lying or not. Then they have to counter SEC, but from the looks of it, seems that Telegram is really on the hot water here. The ball is really on their court to prove that they are not a security token.

Quick update, SEC finds Gram as securities under the Howey Test. https://s3.cointelegraph.com/storage/uploads/view/c527a1e90d0e61f7470ee7ffca156e03.pdf?_ga=2.254326924.567671256.1584965776-579546957.1543762188

^^ Obviously, this is bound to happened, Telegram will lose its battle against SEC here. Do they even think that they can get away with it? Although they are not based on US, but offering it to US securities will likely get them the attention from SEC and this is what occurred here. They failed the Howey Test, so I don't know how they will keep on fighting this one.

What can the SEC or US courts under these circumstances? Can they force US companies such as Amazon (AWS) and Google (GCP) to stop doing business with Telegram which pays for their services?

Any Telegram user will obviously see that Grams ain't a payment method inside the app. So if SEC asked to have some Telegram users in front of the court they might even know what Grams are or what are there use in the Telegram app. They even admitted it in one of their written reports that they have sold grams in order to fund and support their ongoing operations with the Telegram network and nothing about it being a payment method in the app. The only question is what will really happen to their ICO since now it is labelled as a security I know their first buyers would be voided since there is a different procedure for STOs compared to normal ICOs.

Based on this article: https://www.theblockcrypto.com/post/59978/telegram-token-investors-are-now-ready-to-take-refund-offer-report @Theb, again quoting on that article, the launch could be postponed because they needed to work on another set of paper works. So it's pretty much mess up everything on their end.

If you have been reading their court ruling right now you'll see that they may not even have the chance to launch their crypto because the SEC have found or labelled their crypto as a security token rather than a utility token which in this case they have offered it illegally since the court ruled in favor the the SEC's finding. Now they are facing a dilemma about how they will still issue it to non-us investors since it is part of GRAM being labelled as a security token and with that it also applies a ban to non-US investors, the Non-US investors would only receive their GRAMS if they won't resell them to the US market which will be a hard thing to do especially if there are no other international exchange around who will allow the exchange of GRAMS.

They can at list start thinking a better strategy to make refunds to all investors since this is already looking like a dead end, once the court already ruled in favour of the sec, and term the token as security rather than utility that already does it, they already made the mistake of not be clear with their tokens in the first place.

Of course, after the SEC ruling, Telegram has no options but to give a refund to their investors otherwise they might get sued as well and it won't look on their name and as business entity. And it also seems to be that they have deceived their US investors by not telling that they are indeed a security token. So now the ball is on their court and the only option for them is to really comply with the decision.

You bet the funds have already been used up, if not for direct operations, then for litigation costs. Does anyone know if the crypto raised was stored as crypto (in original currency of raise) or if it was liquidated for fixed fiat amount? I keep seeing numbers floating around in fiat. Also, I think investors who say they're deceived are being slightly irresponsible. You know it's a security just by looking at the token. Tokens don't change what they do overnight. Neither do definitions.

They most certainly have used some of it since the Gram sale happened last two years ago but I don't believe that they have depleted that 1.7 billion dollars this easily especially if the lawsuit against them was filed in October of 2019. With them running in donations I believe that they still have the capacity to pay the 175 purchasers back aside from that Pavel Durov is also a billionaire in terms of his net worth after all. I do agree with you that the investors here are irresponsible but they have no play regarding the the emergency action filed against them, it was all SEC's doing and all the witch hunt they are doing in the crypto industry.

It's toast. Telegram have announced that they have thrown in the towel - https://techcrunch.com/2020/05/12/telegram-abandons-its-ton-blockchain-platform/ It looks like they're pinning its demise entirely on the legal meddling they experienced from the US.

I'll go straight on the source: https://telegra.ph/What-Was-TON-And-Why-It-Is-Over-05-12 One thing though, it looks like they spin everything to look likes they are the victim here and blame everyone, including the system but themselves.