Telegram has filed an appeal to the US court, asking them to discharge the litigation made by the Securities and Exchange Commission which claims that its unreleased token is a security.
In Telegram’s address to the court on the 12th of November, the firm explained and disputed all the statements made by the SEC in its litigation filed a month ago. Although they didn’t disclose some fundamental details of the enterprise.
The SEC obtained a restraining order against Telegram and its subsidiary that was creating the TON blockchain network against the $1.7 billion sales of Gram tokens on the 11th of October.
However, the Gram tokens are yet to be released to investors and won’t be until the scheduled release date (31st of October) which has been further postponed due to the SEC’s prosecution.
According to Telegram’s appeal, the SEC’s litigation lacks credence as Telegram’s distribution of tokens was allotted only to sophisticated and accredited investors which complies with the federal securities laws and that Gram tokens when released, will not be classified as securities.
The firm also indicated that the SEC did not properly go about regulating this relatively new sector of the law. They claim that the SEC did not procure adequate direction and prescription of what it considers as an infringement of the federal securities laws and has taken actions that are contradictory to its judicial norm.
The firm also noted that it willingly met with the SEC to seek directions to operate in line with the federal securities laws. Still, the SEC reneged on providing this direction before carrying out this legal action.
The firm, once again, emphasized that its Gram tokens haven’t been manufactured and that when they are, it will be classified as a currency or commodity and not a security.
Telegram admitted to not filing an enrollment declaration with the SEC stating that there was no need or requirement for that based on the federal securities laws.
With that, the firm requested that the court throw out the litigation by the SEC with prejudice as the court considers fair.
The firm has postponed the release of TON blockchain and Gram until the issue has been addressed.
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