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  • Writer's pictureP Xenos and M Bacina

Telegram v SEC: Not even dollars for donuts

Updated: May 2

The Securities and Exchange Commission (SEC) has made some bold assertions in its case against Telegram even further, saying its Gram token is worth less than donuts.

In a recent memo, the SEC submitted to the Southern District Court of New York:

Telegram offered and sold Grams as securities when it promised to deliver them in exchange for funds pursuant to the Purchase Agreements. That reality will not have changed if the Court permits Telegram to deliver Grams to the Initial Purchasers as part of a broad public distribution, which is in violation of Section 5, and which the Court should enjoin.

The SEC also claimed Telegram performed a “a two-step around the registration provisions” and a “sleight of hand” by fabricating the difference between a purchaser’s investment in Grams and their delivery of the Grams. This, according to the SEC, would have allowed them to withhold information that should be documented in regulatory statements.

The document contends that Telegram's argument that the Grams were not part of the securities the purchasers bought because they did not “exist", is a strawman approach, as the Grams will never be tangible. The SEC also asserted:

Telegram’s attempt to avoid this economic truth by labelling Grams ‘commodities’ also fails. Grams are not commodities. Unlike gold, comic books, and Krispy Kreme donuts — commodities Telegram compares to Grams — Grams have no intrinsic value.

The SEC vs Telegram saga is, of course, best enjoyed with a fine Krispy Kreme donut and ultimately serves as both a reminder that a sensible and clear legislative framework is crucial for ensuring a compliant path forward for cryptocurrencies, and that we need more exercise than donuts in our lives.


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