As mentioned in the first and second parts of this story, on March 24, 2020, in a widely reported and closely followed decision, Judge Peter Castel imposed a sweeping preliminary injunction preventing Telegram from issuing its planned crypto asset, Grams. Shortly thereafter, the judge clarified his initial ruling by explicitly holding that the injunction applied to all sales worldwide regardless of where the original purchasers might be located. Efforts by Telegram to see that the Grams would not easily be resold into the United States were unavailing. This part of the story looks at the decision to apply U.S. requirements extraterritorially (outside our geographic borders, to a company headquartered elsewhere, selling to persons located elsewhere).
There is a clear presumption against applying U.S. law to foreign transactions. On the other hand, if the transaction has a sufficient connection to U.S. citizens or markets, U.S. law may be applied. The difficulty is in knowing how much of a connection is required.
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