In the latest from U.S. Security and Exchange Commission’s (SEC) ongoing lawsuit against Telegram for its offering of Gram tokens, the commission bashes the messaging service’s blockchain and related token.
In a lengthy filing with the court of the Southern District of New York the SEC responded to Telegram’s earlier motion for summary judgment. In it, the SEC disparaged the Telegram Open Network (TON) — Telegram’s blockchain — as well as the operation’s Gram (GRM) token.
“Telegram Has Put Forth No Evidence Regarding the TON Blockchain’s State of Development at Launch,” the Jan. 21, 2020 document reads, adding, “Telegram Marketed Few, if Any, Expected Uses for Grams.”
Telegram hosted its initial coin offering (ICO) in 2018, running two private investment stages that banked the messaging company $1.7 billion in total funds.
In 2019, the SEC began an investigation into Telegram’s crypto endeavors, claiming the entity did not register with the commission for the ICO and its Gram tokens.
The SEC’s concerns
According to the recent court filing, Telegram stated use cases for GRM tokens within certain applications. The document, however, also pointed out that GRM usage is not a necessity within such apps.
Additionally, Telegram provided a chart listing GRM uses, applications, etc., although, the SEC also noted several concerns with the company’s chart.
“Telegram’s chart does not distinguish which potential applications have been developed, which are in the process of development, and which are theoretical,” the SEC’s filing detailed. “There is no direct, reliable evidence in the record regarding the nature or state of any of the potential applications listed in Telegram’s chart.”
The court document lists numerous other question marks relating to GRM token usage, as well as Telegram’s entire offering, showing that the SEC has no shortage of concerns on the matter, with no resolution currently at hand.
Over the past two years, Cointelegraph has detailed the SEC’s crackdown on numerous ICOs regarding their associated tokens and blockchains in an effort to police the largely unregulated burgeoning crypto industry.