A federal court is asking the founder of Telegram – Pavel Durov – to testify in the Security and Exchange Commission’s (SEC’s) case against the encrypted messaging service’s latest initial coin offering (ICO) of its new cryptocurrency known as the “gram.”
Telegram Is Trapped in a Big Legal Battle
Telegram has garnered almost $2 billion through the sale of its new gram token, which has been going on since 2018. Overall, the company has done well. The trouble is the SEC is saying they failed to register the token as a security, and a lawsuit has since unfolded. Telegram is asking a New York federal court to dismiss the suit and the charges, claiming that the gram does not share the same properties as other securities.
However, it looks as if for the time being, the suit is being permitted to go forward. Official court documents explain:
Telegram has agreed to stipulate that it will not make any offers, sales or deliveries of its expected cryptocurrency, called ‘Grams,’ in order to maintain the status quo until this court can resolve the legal issues at the heart of the matter.
This means that despite all the money the company has made over the past two years through the token sale(s), investors and customers will not be able to cash in on their grams given that Telegram is not permitted to deliver the tokens until after the court hearing is complete. Thus, it’s not just Telegram that’s suffering through the legal process. More than likely, its customers are having a rough time waiting to get what they’ve initially paid for.
At press time, the hearing is slated to conclude in February of 2020, meaning users still have about three months to go before they can garner their coins. Originally, Telegram had told its investors that their grams would be delivered as early as the end of October, meaning they’re already a month short of expectations.
Back in July, the gram was exploding in price, and all seemed well for the company. However, aside from the current legal proceedings, the encrypted messaging platform has also been hit with various security issues, including a new form of crypto malware that potentially made its way into specific Telegram-based chat groups.
Too Many Security Problems
The malware – known as Masad Stealer – went through various Telegram channels to see if it could potentially find passwords, cryptocurrency addresses and other data that would allow hackers to replace with their own. Thus, any bitcoin, Ethereum or Monero funds the users may have been garnering at the time would inherently be pushed through to a new address controlled by the hacker, ensuring they received the funds instead of the intended party.
Aside from Durov, vice president Ilia Perekopsky is scheduled to testify in London regarding the case on December 16.