SEC Insists Grams Are Securities, TON Launch Not Changing This

In another series of the saga between the Telegram Open Network (TON) as the issuer of Gram (GRM) tokens and the United States Securities and Exchange Commission (SEC), we can see that no one is losing on their opinion. In fact, the crypto news today show that SEC insists that Grams are securities in an official response to the network’s counterclaim.

Following the counterclaim by Telegram on October 16 where the company argued that its native cryptocurrency is not a security and that the preliminary injunction should be denied, the SEC insists that Grams are securities in a new filing in the US District Court for the Southern District of New York on October 17.

In the document, the regulator not only insists that Telegram violated the US securities laws – they also argue that a preliminary injunction should be granted to prevent Telegram from further violation. It also stressed that the company is likely to violate the law again.

The SEC outlined that Telegram’s proposal and attempt to deny the injunction will allow them to continue engaging in violative conduct after five months. This will put the burden on the regulator to seek another restraining order (TRO) from the court. As SEC insists, it is an extraordinary non-justified request that would constitute a waste of judicial and public resources and should be denied.

According to the TRO filed on October 11, Telegram should represent itself in court in a new hearing scheduled for October 24. Right now, the SEC reiterated that Telegram has violated the securities laws by selling Grams which are “securities” under the Securities Act (to certain investors such as US buyers) without any exemption from registration.

SEC insists that Grams are a currency or commodity after the launch of the Telegram Open Network (TON), arguing:

“Defendants’ Opposition to this showing rests entirely on the conclusory allegation that ‘Grams will merely be a currency or commodity’ and therefore not a security ‘once the TON Blockchain launches.’ […] whatever Grams were in 2018 or what they will be whenever Defendants decide to distribute them, Telegram’s mere assertion that Grams ‘will … be’ a ‘currency’ does nothing to cure the prior violation of law.”

Previously, we published multiple reports on Telegram’s case showing key events and issues around TON as a network and the expected Gram (GRM) tokens.