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ARTICLE · 07 APRIL 2020

Court Sides With SEC In Ruling To Prevent Telegram From Distributing Grams

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In the latest development in the ongoing dispute between the SEC and Telegram Group Inc. (Telegram), Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York in a March 24, 2020...

United StatesTechnology
Ayisha McHugh
Ayisha McHugh
Allen Li
Allen Li
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In the latest development in the ongoing dispute between the SEC and Telegram Group Inc. (Telegram), Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York in a March 24, 2020 opinion granted the SEC's motion for preliminary injunction to prevent Telegram from distributing Grams purchased in its initial coin offering (ICO).

The case between the SEC and Telegram began last October, when the SEC filed an emergency action to stop Telegram (and its wholly owned subsidiary TON Issuer Inc.) from continuing its offering of Grams. In 2018, Telegram had raised approximately $1.7 billion through the sale of its ICO to finance the creation of the Telegram Open Network (also known as the TON Blockchain). The SEC alleged that Grams were securities, which Telegram failed to register in accordance with Sections 5(a) and 5(c) of the U.S. Securities Act (Securities Act).

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