According to the SEC, the commission received a temporary ban order from the court against two offshore companies, allegedly selling Gram tokens in the US and abroad. Telegram Group Inc. and its wholly-owned subsidiary TON Issuer Inc. attracted more than 1,7 billion investor funds.
As stated in the lawsuit, fundraising began in January 2018 of the year to finance the business of these companies, including the launch of the Telegram Open Network (TON) blockchain platform and the Telegram messenger.
Defendants sold about 2,9 billion Gram digital tokens at discounted prices to 171 primary buyers around the world, including more than 1 billion Gram 39 investors in the United States, the lawsuit said.
Telegram promised to provide them access to tokens after the launch of the blockchain platform no later than 31 on October 2019, after which buyers could sell them on the US market. The complaint alleges that the defendants did not register the offer of tokens, thereby violating the rules of the American Securities Law.
The defendants did not provide investors with information about operations with tokens, as well as about the financial situation of the company, risk factors and management, as required by the law on securities.
The SEC has repeatedly stated that cryptocurrency issuers do not have the right to circumvent the requirements of federal laws by simply labeling their product as a cryptocurrency or digital token, the commission said. Telegram, in its opinion, seeks to benefit from public offering without observing disclosure requirements aimed at protecting investors.
The lawsuit filed, in addition to suspending the ICO, involves penalties against Telegram.
Telegram Group Inc. and its subsidiary TON Issuer Inc. began to raise capital in January 2018 for the development of the blockchain platform Telegram Open Network (TON) by the Durov team. The cryptocurrency for circulation in TON is called Gram.
As Bloomberg wrote, initially as a result of the ICO it was planned to raise 2,55 billion dollars. At the beginning of 2018, Telegram raised 1,7 billion dollars.
Tokens are sold among a closed circle of investors who have certain competencies in the field of blockchain technologies.
At the beginning of 2018, the media published a white paper-document that describes how the blockchain project of the messenger will work. The messenger owners promised to send part of the attracted money to create their own Gram cryptocurrency and the Telegram Open Network (TON) blockchain platform with their own payment system, the document said.
Telegram expects that its platform will compete with world leaders in the cashless transactions market – Visa and Mastercard. As a result, an entire economy will be created inside Telegram, the TON project description said.
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