The telegram seeks to revert the judge’s recent vote to stop distributing Gram tokens to its initial investors. On March 24, the judge agreed with the US Securities and Exchange Commission’s request to suspend the supply of GRAM.
Immediately after the court judgment was announced, the telegram filed a counterclaim with the Federal Court of Appeal to dismiss the appeal. The court, in its order, had requested the telegram to halt the delivery of its tokens before the formal start of the court proceedings.
According to the Cointelegraph, the judiciary, relying on the documentation of the Securities and Exchange Commission, prevented the distribution of gram to early investors. The Howey Test was reportedly the most important factor in banning the (temporary) distribution of Tegram’s digital currency. In the part of the court order we read:
According to court findings, the SEC has succeeded in proving that the contracts are part of a larger plan to distribute grams in a public market, and according to Hawkeye’s test, Token Telegram’s offering is securities sold.
While this is a negative thing for the telegram before the formal court process begins, some also consider the telegram appeal to be a positive one. Philip Moustakis, a lawyer and former adviser to the US Securities and Exchange Commission, said the issue could create a shortcut for the telegram legal team.
Appeals are usually a sign of misidentification because the appellate court is a supreme court, meaning the telegram will have to show the district court that a clear legal fact has been overlooked or misused.
The court has banned digital currency distribution following a request by the US Securities and Exchange Commission in October last year. According to the commission, the sale of the $ 1.7 billion tokens in the initial release of the telegram coin was the sale of unlicensed securities.
Telegram and its legal team have not yet spoken to the media about the new court ruling and its counter-measures.
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