Telegram is being made to pay more than $600,000 in legal fees to a company called Lantah over the use of the GRAM name that Telegram has given its recent cryptocurrency.
Telegram Must Fork Over the Dough
Lantah was developed in the year 2017 by a man named Daniel Jeffery. Lantah is looking to create a “global, borderless marketplace” and assist those who cannot gain access to traditional banking services with cryptocurrency. As it turns out, both Lantah and Telegram have allegedly utilized the GRAM name for specific projects, and Telegram sued the former about two years ago for copyright infringement.
The GRAM token issued by Telegram came about in an initial coin offering (ICO) that saw nearly $2 billion in investor funds make their way into the hands of the encrypted messaging service’s executives. The sale of GRAM is arguably one of the largest and most successful examples of an ICO in the history of digital currency.
Lantah argued that it had already filed the copyright paperwork for GRAM when it first emerged onto the crypto scene. Ultimately, the court case was taken to Northern California where it was likely to face further arguments, though the Securities and Exchange Commission (SEC) got in the way of this by stating that the GRAM token should have been registered as a security and that Telegram had violated certain agency laws.
Naturally, Telegram stated that its new coin shouldn’t qualify as a security but lost the decision in court. The company abandoned the project last May and decided to refund much of the investor money it had received during the ICO. With no more GRAM tokens being issued, the company does not have the need for the GRAM name any further. Thus, the case with Lantah has come to an end, but it was determined that Telegram still owes legal fees.
Telegram will have to pay about $618,000 in attorney’s funds to Lantah, as well as more than $6,700 specifically to its executives. Originally, Lantah asked for more than $1 million in legal fees given that its lawyers required $900 per hour, though the court has dismissed this notion given the overall lack of support. Instead, Lantah will receive funds to cover $600 per hour legal fees.
The Agency Has Been Very Strict
Telegram, by contrast, will not see the return of any legal monies and is now settling its case with the SEC. the company will pay a whopping $18.5 million. In addition to paying the money, Telegram will also be required to inform the SEC of any plans to issue digital currencies over the next three years.
The SEC has been rather strict as of late when it comes to registering securities. The latest company to fall victim to the agency’s rigidity is Kik, which will pay a $5 million penalty for allegedly failing to register its token as a security.