On March 24, U.S. District Judge P. Kevin CASTEL, of the Southern District of New York granted the SEC request for a preliminary injunction to distribute GRAM tokens. The court finds that the SEC has shown significant success in proving that Telegram’s current GRAM token distribution plan is a securities offering in accordance with the Howey test criteria.
The trial has been ongoing since October 2019. In 2018, Telegram held an initial coin offering. As in many cases with the ICO, the Сommission was of the opinion that, according to the Howey test, the ICO is considered to be a securities offering; thus, in the case of Telegram, these were the unregistered securities.
“The Court also finds that the delivery of Grams to the Initial Purchasers, who would resell them into the public market, represents a near certain risk of a future harm, namely the completion of a public distribution of a security without a registration statement. An injunction, prohibiting the delivery of Grams to the Initial Purchasers and thereby preventing the culmination of this ongoing violation, is appropriate and will be granted.”Lawyer Stephen PALLEY is of the opinion that a temporary injunction will eventually become constant.