Telegram wants to continue its blockchain endeavors and has requested the court to deny any requests from the SEC for a preliminary injunction.
Although the messaging application has been silent since their $1.7 billion token selling about their blockchain project, but to bring the audience and users to speed, they announced that they would be bringing TON blockchain to their application by integrating a wallet to the messaging application where users would be able to trade Telegram’s native tokens, Grams.
Soon after the announcement, the company was asked to halt its operations for investigation by the SEC. The SEC declared the $1.7 billion selling to be illegal as apparently they didn’t register the token selling of ‘securities’ as termed by the SEC.
According to Stephanie Avakian, the co-director of the SEC’s Division of Enforcement:
Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold.
Telegram swiftly denied that Gram tokens are not securities. They assured that as soon as the TON blockchain is launched, the Gram tokens would be nothing but currency or commodity. They also reassured the SEC that Telegram Telegram did not and will not conduct any ICO for securities. They stated:
Unlike other digital assets that were offered to the general public through so-called Initial Coin Offerings (“ICOs”), Telegram did not — and will never — offer any securities to the public through an ICO.
Telegram has aggressively denied all these allegations and has asked the court to let them continue with their operations as the allegations might not be true. They stated in their filing document that the emergency action taken by the SEC against Telegram was an emergency of their own making. They further blamed that the SEC knew about the launch all along as they were notified on each step during the last 3 years. They even stated that this delay was propaganda against Telegram, as the SEC already knew that if TON’s launch was delayed, they would have to reimburse the investors, as promised. According to the filing:
Despite the SEC knowing for 18 months that if the TON Blockchain did not launch by October 31, 2019, Telegram would be obligated under its agreements with private purchasers to return the funds it raised, the SEC (i) never requested that Telegram delay the launch of the TON Blockchain; (ii) never advised Telegram of its intention to seek injunctive relief; and (iii) waited until the eleventh hour to file an ex parte application to enjoin Telegram’s launch.
The temporary feud between Telegram and SEC seems to be hurting Telegram’s ambitions and might be very hurtful monetarily as they have already promised their investors that if they will not launch the blockchain by October 31, they will reimburse all the money.