Telegram Denies All SEC Allegations, Makes A Plea To Dismiss Actions

Telegram denies all of the SEC allegations and made a plea to the US Court to drop an action that was brought by the regulator alleging its yet-to-be-launched token is security as we reported before in the crypto news.

The messaging app company Telegram filed a plea to the district court of the Southern District of New York on Tuesday and denied all of the allegations that were made by the Securities and Exchange Commission in the case that was brought up last month that compelled some of the fundamentals such as the nature of the company and the inconsistent details of the fundraise.

On October 11, the SEC secured a restraining order against the Telegram Group and its subsidiary developing the TON blockchain network against the $1.7 billion sales of the gram tokens. The SEC Division of Enforcement co-director Stephanie Avakian said that at that time the emergency action was meant to prevent the company from flooding the US markets with digital tokens that were reportedly unlawfully sold.

However, the gram tokens while sold, are still not issued or distributed to investors and would not have been until the launch of the TON blockchain and that had been scheduled for October 31 but was delayed by the SEC:

 “[The SEC’s] claims are without merit as Telegram’s private placement to highly sophisticated, accredited investors was conducted pursuant to valid exemptions to registration under the federal securities laws and Grams will not be securities when they are created at the time of launch of the TON Blockchain.’’

After the statement where Telegram denies all allegations from the SEC, the co-director of another SEC Division of Enforcement Steven Peikin stated:

 “We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token. Telegram seeks to obtain the benefits of a public offering without complying with the long-established disclosure responsibilities designed to protect the investing public.”

Telegram says that the SEC has ‘’engaged in improper regulation by enforcement’ in this area of law and failed to provide clear guidance and notice of the views as to what conduct constitutes a violation of the securities laws.