- The Securities and Exchange Commission (SEC) has requested John Hyman’s testimony in an investigation against Telegram’s GRAM token.
- The investigation aims to gather evidence to prove that Telegram conducted an illegal sale of a security.
CNF has closely followed the legal developments surrounding the Telegram token, GRAM. In a new development, the SEC is trying to gather evidence to prove that Telegram conducted an illegal sale of a security. Telegram’ token, known as Gram, is one of the projects of companies trying to issue their own cryptocurrency. For this reason it is one of the direct competitors of Faceook’s Libra. Both projects have seen great resistance from the regulatory authorities of the United States and the European Union.
Possible key witness for the SEC
At the end of November, the SEC took a first step in its investigation against Telegram. The American financial authority issued a temporary restraining order against Telegram Group Inc. and its subsidiary Ton Issuer. The U.S. regulator accused both entities of performing an ICO on an unregistered security. As consequence the SEC filed a lawsuit at the Southern District Court of New York.
Last week the case had a new development. According to reports, CoinDesk has gained access to legal documents held by the SEC from close sources. The documents are reported to be already available to the New York court. According to these documents, he institution appealed to the High Court of England to obtain the cooperation of John Hyman, a former investor of Morgan Stanley, residing in the United Kingdom.
Hyman is supposed to have important information related to the alleged ICO of the Gram token. The banker is said to have managed the acquisition of GRAM buyers:
[He] communicated with Grams purchasers, confirmed transaction details, and provided ongoing updates to investors about investments.
SEC arguments for classifying GRAM as an unregistered security
The evidence behind the SEC’s demands is a series of emails among U.S. investors. For now,, Hyman has shown little willingness to collaborate with the U.S. agency. Accoding to documents, however, the SEC has gathered enough evidence to ask for support from legal institutions in the UK.
Hyman has moved to the UK after being fired from Telegram. In Europe, the former banker works for Gram Vault, a Gram custody company. Despite his dismissal, according to the SEC, he continues to act as an intermediary between Telegram and exchanges that could list the token. Because of this, Hyman is described by the SEC as a very important witness who could provide decisive evidence.
In addition, the SEC asserts that the Telegram token is a security because of its intrinsic characteristics. The objective of trading with GRAM, the SEC said, would be to make a secondary profit for investors. Once acquired, the tokens would be resold for an out-of-regulation profit. This SEC argument does not correspond to the objective that Telegram has proposed – a utility token for the interaction in an ecosystem.
The SEC and Telegram are scheduled to meet in court in February 2020.