The Securities and Exchange Commission (SEC) today announced that it has filed an emergency action and obtained a temporary restraining order against Telegram Group Inc and its subsidiary ‘TON’ Issuer Inc who conducted an unregistered offering for Telegram’s TON tokens in the U.S. and overseas.

SEC Halts Telegram’s TON project

According to the SEC’s complaint, the two entities Telegram Group Inc. and its subsidiary TON Issuer Inc. began raising capital in January 2018 and raised more than $1.7 billion of investor funds. The SEC alleges that Telegram failed to register its offers and sales of Grams as ‘securities’.

Approximately 2.9 billion digital tokens called “Grams” were sold at discounted prices to 171 initial purchasers worldwide, which includes more than 1 billion Grams to 39 U.S. purchasers promising to deliver the Grams to the initial purchasers upon the launch of its blockchain by no later than October 31, 2019.

Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement said that “Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold”.

He added, “We allege that the defendants have failed to provide investors with information regarding Grams and Telegram’s business operations, financial condition, risk factors, and management that the securities laws require.”

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