New York Federal Judge Kevin Castel supported the position of the U.S. Securities and Exchange Commission (SEC) and blocked the distribution of Gram tokens of the Telegram Open Network (TON) project.
The court ruled that the distribution of these tokens would violate US securities laws. The document stresses that investors would not invest $1.7 billion in Gram tokens simply to hold or move funds. Instead, Telegram has convinced investors that they can resell tokens and make profits.
"Given the economic realities of the Howie test, the court believes that reselling Gram tokens in the secondary market would be an integral part of the sale of securities without mandatory registration," the court said in its decision.
Gram tokens were offered under the "Simple Agreement for Future Tokens" (SAFT). The document itself was supposed to be an investment contract and a security, while tokens are not securities. However, the court ruled otherwise, and this may lead to many other similar decisions in similar cases.
"The court believes that supplying Gram to primary buyers who would resell it on the secondary market would lead to almost imminent infringement, namely the sale of securities without registration. An injunction to prohibit the distribution of tokens to primary buyers prevents this violation and is appropriate, and thus will be provided," concluded Judge Castel.
Currently, the ban on the distribution of Gram tokens is temporary, but it is an important decision, which means that eventually the court will impose a permanent injunction. Telegram can appeal, but only with special permission.
Earlier it was reported that the ICO Telegram, held in 2018, was attended by Roman Abramovich and former Russian Minister Mikhail Abyzov.
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