Telegram Appeals Court docket Ruling Barring Gram Token Distribution

The Telegram messaging platform has appealed a U.S. courtroom ruling prohibiting it from distributing its gram cryptocurrency.

U.S. District Decide P. Kevin Castel of the Southern District of New York stated Tuesday that Telegram’s 2018, $1.7 billion token sale seemed to be an unregistered securities sale, and barred the corporate from issuing grams after it launches its Telegram Open Community. The ruling granted a preliminary injunction request filed by the U.S. Securities and Change Fee (SEC), which sued Telegram final October.

Telegram filed discover late Tuesday that it could be interesting the choice to the US Court docket of Appeals for the Second Circuit, although it has not supplied additional particulars as of press time.

An lawyer for Telegram didn’t instantly reply to a request for remark.

Telegram initially supposed to launch its blockchain final yr, however pushed the date to April after the SEC go well with started.

Legal professionals Lewis Cohen and Gabriel Shapiro each agreed on Twitter that the decide’s ruling made sense however each wished for extra clarity and guidance from the opinion.

Shapiro wrote late on Tuesday that he “wouldn’t be shocked if Telegram appeals,” although in his view “it is principally a query of their urge for food for persevering with litigation and the way keen SAFT [Simple Agreement for Future Tokens] patrons are to barter a brand new take care of Telegram over these points.”

“The novelty on this case, and within the SEC’s criticism, is the allegation that the purchasers of the presale association are underwriters. In different phrases, they’re alleged to be a part of the very scheme to finally promote tokens to the general public,” Van Valkenburgh stated.

These traders would due to this fact not have the ability to make the most of a secure harbor underneath present legislation, he wrote.