SEC takes action against Gram digital token issuers

Daniel Fowler
October 13, 2019

The US Securities and Exchange Commission (SEC) has obtained an emergency restraining order against the Telegram Group and its subsidiary TON Issuer.

Choosing to launch their network and native token without regulatory consultation was seen as a bold move from Telegram; however this appears to have backfired as the SEC has finally chose to "halt" their token offering.

"Our urgent actions today are created to prevent Telegram from flooding the American markets with tokens, which we assume were sold illegally", the SEC spokeswoman Stefani Avakian said in a statement. Stephanie Avakian added that the company, in the eyes of the SEC, has "failed to provide investors with information regarding Grams and Telegram's business operations, financial condition, risk factors, and management that the securities laws require". A billion of those tokens were purchased by people in the US.

Renault board ousts Thierry Bollore as CEO
Renault said in a statement that Clotilde Delbos would serve as CEO until a permanent replacement for Bollore is found. In an interview with French publication Les Echos on Thursday night, he accused his colleagues of a power grab move.

Telegram, as Coinfomania reported, had promised to deliver Gram tokens to investors before the end of October 31, 2019, but the SEC has now stepped in a move created to stop billions of Gram tokens from entering the U.S market.

The case file says that these companies began to raise capital in January 2018. In effect, a public offering of an unregistered security.

Also notable is the fact that it was only earlier this week that Telegram confirmed that it was affiliated with Gram tokens as well as the TON Blockchain, which hosts the cryptocurrency. Almost $1.7 billion has been raised by TON to launch a blockchain-enabled payment network that can be used over their messaging app and the scope of potential mainstream adoption is arguably on par with that of Facebook's Libra, should that ever see the light of day. The complaint charged both Telegram and TON with violating the registration provisions of Sections 5 (a) and 5 (c) of the Securities Act while seeking certain emergency relief, permanent injunctions, disgorgement with prejudgment interest and civil penalties. Recently, Block.one, creator of EOS, settled with the SEC for several million dollars on an ICO that raised about $4 billion.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER