Telegram’s ICO case with U.S Securities Commission (SEC) drags on as a New York judge extends the restraining order keeping the GRAM investors in wait for their tokens. As the April deadline approaches, whereby investors in Telegram’s $1.7 billion USD ICO will have the option to claim a refund, the case hangs in the balance as the crypto community watches on for any new regulations from the case.

In a case that SEC says Telegram’s GRAM tokens are securities and should have followed Regulation D standards during issuance, a lot remains at stake with the April 30 deadline on Telegram’s sale coming up. A New York Judge, Kevin Castel, extended the date when distribution of the GRAM tokens to investors can start, indefinitely in a case hearing on Feb. 19.

Speaking at the hearing Telegram lawyers argued that the GRAM tokens are in no way securities but public decentralized currencies contrary to SEC’s belief. The Howey Test, a test that determines what qualifies assets to be classified as securities, will be needed to determine if GRAMs are securities. However, Telegram remained firm on development of the TON network asking the court to allow developers to work on the project as the ruling awaits.

The investment contract with the private investors who took part in the Telegram ICO set a clause that gives the investors a choice to take a refund if the GRAM tokens are not released by April 30th 2020. This is an extension from the October 2019 deadline set during the fundraising. The judge said he was aware of the pending deadline stating the court will reach its final decision before the deadline if need be.

Telegram’s lawyer Alexander Drylewski accepted the court's stance and if the messaging firm is not able to reach an extension of the deadline then the judge will make a decision instantly.

The dragging on of the case is set to take even longer with experts having a say in the possible scenarios the $1.7 billion ICO saga could spin out. John Berry, a partner at Munger Tolles & Olson LLP, believes the dragging out of the case increases the chance that the judge will rule in Telegram’s favor.

However, Yankun Guo, a lawyer based in Chicago, disagrees with Berry’s analysis stating the court is likely to side with the securities agency. Guo said,

“The fact that Judge Castel had granted an emergency restraining order signals that he believes the SEC position has merit and is likely to succeed.”

Furthermore, ruling in favor of Telegram, may set precedent for other companies to offer their ICOs (some of which may be illegal). She said,

“which could signal to other companies that their activities are legal and potentially allowing illegal activity to occur.”

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