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TON under attack: SEC accuses Telegram of illegal ICO

SEC-accuses-Telegram-of-illegal-ICO SEC accuses Telegram of illegal ICO

The American regulator dealt an unexpected blow to the upcoming TON blockchain, accusing Telegram of unregistered sale of tokens a year and a half after the ICO.

The U.S. government seems to consider corporate cryptocurrencies more dangerous than public blockchains. Until now, all the claims of regulators and politicians have been streaming on Facebook for the Libra project, and a similar development by Telegram, which began selling $ 1.7 billion in tokens in January and March 2018, has remained in the background. However, this silence was deceiving.

On the evening of Friday, October 11, the SEC demanded to freeze the sale of Gram tokens and blamed the two companies - Telegram Group Inc. and her "daughter" TON Issuer Inc. in unregistered sale of tokens and insufficient informing of investors. The relevant press release was posted on the SEC website.


According to a press release, these organizations sold 2.9 billion Grams tokens at discounted prices to 171 investors, with 1 billion Gram sold to 39 buyers in the United States. In addition, after the launch of the blockchain, which should take place no later than October 31, tokens can go on sale for all US citizens.


The SEC states that the above companies have not registered the sale of tokens, which are securities, which violates the Security Act of 1933. 

"Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold. 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," 

said Stephanie Avakian, Co-Director of the SEC's Division of Enforcement.

"We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token. Telegram seeks to obtain the benefits of a public offering without complying with the long-established disclosure responsibilities designed to protect the investing public," 

added Steven Peikin, Co-Director of the SEC's Division of Enforcement.

After such accusations, the prospects for the TON project are seriously shaken. Probably, this will not lead to the cancellation or prolonged delay of the blockchain launch if the development is really at the last stages. 

However, the legal status of the project and Gram tokens now looks doubtful, since investors will not be able to legally dispose of tokens before the SEC is withdrawn. 


Moreover, now investors who doubt the future of the project will receive a legal basis for demanding a return on their investments. In addition, the obstacles raised by regulators will force other corporations planning to issue tokens to think about the feasibility of developing such initiatives.

SOURCE

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