Telegram Responds To SEC, Stating That GRM Tokens “Are Not Securities”

Yesterday, news broke showing that Telegram will delay the launch of its GRM token by as long as 6 months. Currently, it seems like the platform is pushing back against the US Securities and Exchange Commission, too. The crypto news today show that Telegram responds to SEC in an official way, filing a letter to the securities regulator on Wednesday and writing that the SEC emergency injunction last week was unwarranted.

As it stands, Telegram is asking for a federal court to deny the regulator and its motion to enforce a subpoena. Furthermore, the messaging giant argued its upcoming Gram token and said that it is not a security – and that the SEC should not be able to force the company to produce any documents about the blockchain project in general.

Meanwhile, the SEC filed an emergency action preventing Telegram from distributing its Gram (GRM) tokens. The altcoin news also show that Telegram violated federal laws by selling an unregistered security. Now that Telegram claims that GRM tokens are “not securities” the SEC’s emergency action “runs counter to longstanding Supreme Court precedent, the SEC’s own views relating to other cryptocurrencies, and common sense,” according to Telegram.

As Telegram responds to SEC, the filing shows that they “did not…offer any securities to the public” through an ICO, referencing the $1.7 billion that it raised using a Simple Agreement for Future Tokens (SAFT) framework.

“Telegram entered into private purchase agreements with a limited number of highly sophisticated purchasers (the ‘Private Placement’) that provided for the future payment of a currency (grams) but only following the completion and launch of the TON Blockchain,” the filing in which Telegram responds to SEC said.

It also added:

“Significantly, Telegram has already treated the Private Placement as a securities offering pursuant to valid exemptions to registration under the Securities Act of 1933. The grams themselves, as distinct from the purchase contracts, will merely be a currency or commodity (like gold, silver or sugar) — not a ‘security’ — once the TON Blockchain launches. “

After the SEC’s action, Telegram emailed its investors and noted that while the company intended to launch TON by the end of October, “the recent SEC lawsuit has made that timing unachievable.”