How Far Can a Provisional Provision Come from a U.S. Court? The answer to that question is everything for Telegram’s controversial TON blockchain project.
TON has been under legal fire recently after the SEC learned of its token sale. The drama is ongoing just this week, when a federal district court judge issued a preliminary injunction against Telegram over his initial ten-digit coin offering. The claim is that Telegram’s GRAM token, which worked on the TON blockchain, was illegally sold as security, and the judge in fact sided with the SEC over the case.
Judge P. Kevin Castel filed an opinion with New York’s Southern District Court and wrote this week that “the SEC has shown a high chance of success by proving Telegram’s current plan to distribute Grams is an offer of securities under the Howey test. “
The Howey test is a legal measure used to determine whether a financial instrument meets the definition of a security – in order to pass the Howey test, it must be called a security (and thus subject to regulation).
Now Telegram’s lawyers are firing back with their own paperwork to learn more. They wrote the judge a letter asking for the warrant in detail.
(De) Defendants try respectfully to clarify whether the scope of the provisional injunction set forth in the Order applies only to Purchase Agreements with US-based investors. We appreciate the Court’s attention on this matter and are available if the Court wishes more information on this request.
In other words, their question is, does this warrant only apply to ICO investors in the US or anyone else?
Telegram raised $ 1.7 billion during his ICO, and a clear majority of that money came from outside the U.S. borders. If the injunction only applies to US-based investors, it is theoretically feasible that Telegram still launches TON without US money.