Secure messaging company Telegram fought to move ahead with a planned launch of a new cryptocurrency in April, appealing a newly issued court order which would block the move.
Earlier this week, a US court ordered the company to halt the rollout of its Gram currency, siding with arguments from the Securities and Exchange Commission (SEC) the company had failed to register its offering with the proper authorities.
Telegram was originally expected to launch Gram in October 2019, having raised $1.7 billion in February and March 2018 for development of the cryptocurrency through initial coin offering (ICO) pre-sales, a process investment-focused outlet Investopedia describes as the virtual currency equivalent to an IPO.
The launch was subsequently moved to 30 April after the SEC filed a complaint with a court in October 2019, arguing the ICOs violated US laws because Telegram failed to register them as securities transactions.
In a decision issued yesterday (24 March), a judge granted the SEC’s request for a preliminary injunction blocking Telegram from distributing Gram tokens next month as promised.
It previously argued its coin offerings were exempt from SEC oversight, however the judge determined it did not qualify for an exemption because the tokens sold to investors were intended for resale on the secondary public market, and thus qualified as securities requiring registration.
Telegram immediately appealed the decision.
The SEC previously said it is seeking a permanent injunction against the launch.Subscribe to our daily newsletter Back