US District Judge P. Kevin Castel has rejected Telegram's request to distribute its Gram tokens to non-US investors.
According to the judge's ruling, Telegram's claim that non-US investors will not sell Gram tokens to US investors is unconvincing:
"Focusing upon the Initial Purchasers and their Gram Purchase Agreements misses one of the central points of the Court’s Opinion and Order, specifically, that the 'security' was neither the Gram Purchase Agreement nor the Gram but the entire scheme that comprised the Gram Purchase Agreements and the accompanying understandings and undertakings made by Telegram, including the expectation and intention that the Initial Purchasers would distribute Grams into a secondary public market."
The court has thus accepted the arguments of the US Securities and Exchange Commission (SEC) that, according to Howey's test, a scheme consisting of the sale of SAFT contracts, the distribution of tokens and their release on the secondary market can be considered a security.
Judge Castel has also highlighted that the decision made on October 11, 2019 included the ban on the distribution of Gram tokens to all investors, and Telegram never questioned this decision.
In addition, Castel believes Telegram Open Network (TON) offers anonymity to its members, meaning that investors can simply hide their identity and say they are not US residents even if they are.
The launch of TON should take place before April 30, otherwise, Pavel Durov will have to return the funds to investors. At the same time, the developers are exploring the possibility of launching the network without Telegram's participation.
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