The US Securities and Exchange Commission (SEC) announced that it has obtained a restraining order against two offshore companies that allegedly carry out unregistered placement of tokens in the United States and abroad and during which they attracted more than $ 1.7 billion from investors.
The SEC lawsuit said that in January 2018, these companies began to attract investor money to develop the TON blockchain and the Telegram messenger mobile app, the commission said. Defendants sold about 2.9 billion Gram tokens to 171 customers worldwide, of which more than 1 billion Gram was sold to 39 investors in the United States. Telegram made a commitment to the ICO participants to launch the blockchain no later than October 31, 2019. By this time, investors and Telegram should have been able to sell billions of Gram in the US market, the document says. The SEC lawsuit states that the defendants did not register the sale and further circulation of Gram, and this is a violation of the provisions of the US Securities Act of 1933.
“Our emergency measures are designed to prevent Telegram from flooding the US market with digital tokens that were sold illegally. We assume that the defendants did not provide investors with information about business operations, financial conditions, risk factors and the management of Gram and Telegram, ” Stefani Avakyan, SEC Co-Director of Law Enforcement, is quoted in a press release.
The second co-director Stephen Paykin added that the SEC has repeatedly stated that issuers cannot escape the requirements of federal laws by simply calling their product cryptocurrency or a digital token. Telegram wants to get the benefits of public offering, without bearing responsibility for the disclosure of information that should protect investors.
The lawsuit filed by the SEC on Friday with the Manhattan Federal District Court, demanding urgent interim measures, follows from the document. The names of five members of the commission department responsible for cybercrime who are investigating the case are also listed there.
Reactions from Telegram or its founders have not yet followed.
What’s next: There is still no established practice for resolving SEC claims against cryptocurrency issuers. But last week, the regulator reached a pre-trial agreement with Block.One, to which a similar lawsuit was filed for an unregistered $ 4.1 billion ICO in 2017. Block.One agreed to pay a fine of $ 24 million. At the same time, the SEC took into account that the company began selling tokens even before the ban on unregistered placements was adopted, and the placed openings were already out of circulation. It will be difficult to judge what the court decision will be in the case of TON.
What about the project: On October 2, the Telegram team sent a letter to investors stating that the TON blockchain would be launched on time. In the letter, the developers also gave instructions on how to get their cryptocurrency for investors: for this it was necessary to create a special crypto wallet, and it was proposed to do this no later than October 16.
In the context. Almost simultaneously with the SEC statement, it became known that a competing project from Facebook, which is trying to launch Libra, a cryptocurrency secured by fiat money, also faced serious problems. As reported earlier, the largest financial partners of the social network, Visa, Mastercard, Stripe and Ebay, left the project. Earlier, the project left PayPal. The decision of the companies is most likely due to the fact that regulators in Europe and the United States began to sound the alarm once the project was announced: in their opinion, Facebook does not provide enough information about how Libra will be protected from laundering and whether it will turn it is in one of the channels through which terrorist financing goes. The withdrawal of Facebook’s largest partners from the project calls into question its continued existence, specifying that some companies have reserved the opportunity to return to it when questions from regulators are removed.