Telegram Points to a New Precedent That Could Ruin SEC’s Court Case

Telegram pointed to a fresh precedent that could reinforce the company’s arguments against allegations by the Securities and Exchange Commission (SEC) about a violation of US securities laws.

In a letter dated March 6 to Judge Kevin Kastel Telegram draws attention to a recent case, the decision of which, in the company’s opinion, casts doubt on the validity of the SEC lawsuit.

Telegram points to a recent California Court of Appeal ruling, which has little to do with cryptocurrency regarding the repair and leasing of premises in Los Angeles. According to Telegram, a California court ruling on Siry Investment’s lawsuit confirms Telegram’s stance against SEC.

Telegram claims that there is a similarity between the terms used in the Gram token purchase agreement and those used in the Siry agreement. The company writes:

“As in Siry, these [Gram] provisions demonstrate that the economic reality of the private placement was not to distribute securities to the public in violation of the U.S. securities laws.”

The company does not agree with the SEC stance that not only the purchase agreements but also the Gram tokens themselves are securities. Here, again, Telegram points to Siry’s precedent and states that Gram tokens should not be regarded as securities.

The SEC, for its part, challenged the arguments of Telegram and sent a letter to the court on March 9. The commission stated that Telegram’s argument reflects the tendency of the company’s representatives to ignore the principle of essence prevailing over the form and is another attempt to hide the economic reality and the conditions of the deals in this process.

Author: Marko Vidrih

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