Telegram is made to pay over $600,000 in legal fees to a company named Lantah to use the GRAM name that Telegram used for its cryptocurrency.
Both Lantah and Telegram have allegedly utilized the GRAM name for different projects, and then Telegram sued Lantah about two years ago for copyright infringement.
The GRAM token launched by Telegram came about it an ICO and saw nearly $2B in funds make their way to the hands of the messaging service’s executives. GRAM’s sale is one of the leading and most successful examples of an ICO in the history of digital currency.
Lantah had argued that it had already filed the GRAM copyright paperwork when it joined the crypto scene. The court case was then taken to Northern California, where it was likely to face more arguments. However, the SEC got in the way by stating that the GRAM token shall be registered as a security and that Telegram has violated some agency laws.
The telegram stated that its new coin shall not be qualified as security but then lost the court’s decision. Last May, the company abandoned the project and decided to refund much of the investor money it received during the ICO. Now, the company doesn’t need the GRAM name any further. With this, the case with Lantah comes to an end, but it was determined that Telegram owes legal fees.
Telegram will pay over $618,000 in attorney’s funds to Lantah and an additional $6,700 to its executives. Lantah asked for more than $1M legal fees because its lawyers required $900 per hour, but the court dismissed this because of the lack of support. Instead, Lantah will receive funds to cover $600 per hour of legal fees.
The Agency is Very Strict
Telegram will not see any legal money return and is now settling its case with the SEC. The company will pay $18.5M. Besides spending the money, Telegram will also be required to inform the SEC of its plans to issue digital currencies in the next three years.
The SEC was very strict as of now when it comes to registering securities. The latest company that has been victimized by this severity is Kik, which will pay a $5M penalty for failing to register its token as a security.