Telegram has received a counter application from the United States Securities and Exchange Commission, wherein the regulator is asserting that TON’s Gram token are securities under Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) and Telegram can’t deny this.
“[S]imply labeling an investment opportunity as ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract—security—into a currency.” The Filling reads.
On Oct 16, Telegram has shown the denial against the U.S. Securities and Exchange Commission’s (SEC) request for a preliminary injunction to the United States District Court for the Southern District of New York (The Mother Court).
In the filling, the defendants (Telegram & TON) have refused to cooperate with the SEC’s appeal, which is required to aid the court’s resolution that the federal authority requested earlier. On Oct 11, in the filled temporary restraining order (TRO) by SEC, Telegram was asked to be presented in the court hearing in New York on Oct. 24.
SEC vs Telegram Group Inc. & TON Foundation Inc.
On Oct 17, SEC submitted a new filing against Telegram Group Inc. & TON Foundation Inc. in response to the Defendants’ Response in opposition to the SEC’s Emergency Application for Preliminary Injunction.
SEC in its latest filing stated, that after five months the defendants would again involve in violating conducts if their counter-proposal would be accepted by the court and haven’t put the preliminary injunction on them.
SEC mentions that the violating affairs of Telegram & TON would put the burden on the regulators to sought another TRO from the court. While highlighting the denial point, SEC mentioned that Telegram’s request is non-justified and extraordinary and a waste of judicial and public resources.
SEC’s concerns against Telegram & TON indicate that the establishments are expected to violate the federal laws in the future, meant for securities. Thus, the preliminary injunction should be granted to stop the unethical activities and to make the defendants conduct their actions, as per the long-established decree of 1933.
The information further displays that SEC is not ready to accept Telegram’s counter reply which communicated that “after the launch of the Telegram Open Network (TON) Grams will merely be a currency or commodity.”
On this point, SEC has claimed that the TON launch won’t change the violating acts performed by the defendants. The preliminary injunction should grant or, alternatively, extend the TRO and conduct a preliminary injunction hearing.
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