The United States Securities and Exchange Commission has announced that upcoming Gram token from Telegram is an unregistered security and therefore illegal. Both Telegram Group Inc. and TON Issuer Inc. didn’t register their digital tokens as securities. That’s why the SEC announced an emergency restraining order against these two companies. As a result the Gram tokens can’t be released onto the U.S. market on October 31st.
Telegram managed to sell 1.7 billion dollars worth of Gram tokens to early 171 investors worldwide. According to the SEC there are 39 investors from the United States. The 171 investors got over 2.9 billion Gram tokens. One billion of these tokens are meant for American investors.
“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.”Steven Peikin, Co-Director of the SEC’s Division of Enforcement
SEC will likely make Telegram pay up
In the past few months we’ve seen the SEC crackdown on a variety of crypto and blockchain projects. The Securities and Exchange Commission already started this last year. The organization first issued enforcement actions to companies that faked business relationships.
In recent weeks there have also been multiple reports. In the first week of October both Nebulous and Block.One receives fines from the Securities and Exchange Commission. These two companies had to pay 224 thousand dollars and 24 million dollars for failing to register their tokens as securities.
None of the companies involved admitted their ‘crimes’, but they paid their fines. That’s why Nebulous can now continue working on the blockchain-powered file storage system Sia, while Block.One is behind the EOS blockchain. Block.One managed to gather 4.1 billion dollars between June 2017 and June 2018.
Based on these recent examples, it’s likely that Telegram needs to pay around 0.6 percent of its acquired money. In this case that would mean around 10.2 million dollars. After that the now illegal gram tokens will suddenly be registered securities and Telegram can continue its operation.
Also published on Medium.