SEC Says Telegram’s Gram is Worth Less Than Donuts

On January 27, the Securities and Exchange Commission (SEC) strengthened its positions in a lawsuit against Telegram, claiming that its Gram token is worth less than donuts.

The SEC’s counter

The latest intel from the battlefield between the SEC and the Telegram Open Network (TON), the SEC stated in a memorandum to the Southern District Court of New York:

“Telegram offered and sold Grams as securities when it promised to deliver them in exchange for funds pursuant to the Purchase Agreements. That reality will not have changed if the Court permits Telegram to deliver Grams to the Initial Purchasers as part of a broad public distribution, which is in violation of Section 5, and which the Court should enjoin”.

In the memorandum, the commission listed some jibes against the messenger. The SEC called out Telegram for doing “a two-step around the registration provisions” and performing “sleight of hand” by forging the difference between investment and delivery of the Grams, which would allow them to withhold information on a regular basis in regulatory statements. The document maintains, that Pavel Durov’s brainchild gave a “strawman” argument about “existence” since “Grams will never be tangible. The SEC proceeded with heating the situation up, writing:

“Telegram’s attempt to avoid this economic truth by labelling Grams ‘commodities’ also fails. Grams are not commodities. Unlike gold, comic books, and Krispy Kreme donuts — commodities Telegram compares to Grams — Grams have no intrinsic value.”

Telegram’s war with the SEC

Earlier CryptoTheNews shared reports about Telegram’s battle with the SEC, the most recent being the questioning of TON state of development.

As the allegations have it, Telegram would have sold Grams only to accredited investors in the initial coin offering (ICO). But holders then began to resell them, which was considered to be a violation of Rule 506(c), according to the SEC:

“Once Telegram delivers the Grams to the Initial Purchasers, they will be able to resell billions of Grams on the open market to the investing public. Telegram and/or its affiliates will facilitate these sales on digital-asset trading platforms. Once these resales occur, Telegram will have completed its unregistered offering with billions of Grams trading on multiple platforms to a dispersed group of investors.”