If you are following Telegram case of banning the distribution of Gram tokens, you are already know from our latest article “Telegram wants to distribute GRAM tokens to investors outside the US” that Telegram has called on a court to review distribution outside the US to abroad.
Telegram claimed that more than 70% of investors purchased ICO from abroad.
The Telegram proposed:
“Will implement safeguards to protect against non-U.S. private placement purchasers reselling Grams to U.S. purchasers in the future, including but not limited to imposing express contractual prohibitions as a precondition to non-U.S. private placement purchasers receiving Grams upon launch of the TON Blockchain and configuring the TON digital wallet to preclude U.S.-based addresses.”
The Court see several problems with this proposal:
- First, Telegram does not explain how the imposition of these new restrictions would be lawful modifications of the Gram Purchase Agreements entered into in 2018.
- Second, and more fundamentally, the TON Blockchain was designed and is intended to grant anonymity to those who purchase or sell Grams.
- Therefore, any restriction as to whom a foreign Initial Purchaser could resell Grams would be of doubtful real-world enforceability.
- As to the TON Wallet, Telegram maintains that the TON Wallet is distinct from the TON Blockchain and is a useful but non-essential feature.
- Telegram does not show how withholding the TON Wallet from self-reported U.S. users, who are otherwise anonymous and could simply disclaim having a U.S.-based address, would be efficacious or enforceable.
- Further, Telegram’s new proposals are raised long after the preinjunction discovery period has closed and, as such, the SEC has been deprived of the opportunity to challenge their efficacy through expert testimony or other evidence.
The court stated at the end:
“The language including a prohibition on “delivering Grams to any person or entity or taking any other steps to effect any unregistered offer or sale of Grams” has been in the SEC’s motion since its inception. One would expect a party opposing a preliminary injunction to include an argument in its very fulsome submissions that the grant of the requested injunction would be needless, overbroad, unworkable, apply extraterritorially, or any other argument it wished.
In its opposition to the preliminary injunction, Telegram raised no objection to the form of the injunction and never cited the Morrison case.”