The court rejected Telegram’s request to issue Gram tokens to non-US investors
Federal Judge for the Southern District of New York Kevin Kastel rejected Telegram’s request to clarify the possibility of distributing Gram tokens bypassing American investors. CoinDesk writes about it. Last week, Kastel banned Telegram from issuing Gram tokens to participants in its $ 1.7 billion ICO.
Earlier, Telegram promised “to provide precautions to prevent the resale of Gram tokens by non-US private placement participants to US buyers in the future.” It was assumed that non-US investors would commit themselves not to resell tokens to Americans, and appropriate restrictions would be imposed on the wallet side..
The judge found the argument unconvincing: “The defendant overlooks one of the key points of the decision: the ‘security’ is not the agreement to purchase Gram or the Gram itself, but the whole scheme, including the activities of Telegram and investors’ expectations from the distribution of Gram in the secondary market”.
He also noted that Telegram was unable to explain exactly how it would prevent the resale of tokens to Americans or how it would legally change the agreements for their purchase. In addition, according to Kastel, the TON blockchain confers anonymity on its participants, and investors can simply declare that they are not US residents..
The judge declined to comment on Telegram’s claim that the SEC has no jurisdiction in this case, as it was filed later, and promised to consider it further..
Lawyer Gabriel Shapiro noted that the judge seems to have a good understanding of how the blockchain works. “I think Judge Kastel fully agreed with the SEC that Telegram’s arguments about the extraterritorial application of laws after the decision were made were belated. His response to a request for clarification also demonstrates respectable technology savvy and skepticism, as he acknowledged that Telegram’s proposal to use an identity wallet does not limit the ability to distribute Gram through other wallets based on the open source TON blockchain protocol. ” – said Shapiro.
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