The SEC, Securities and Exchange Commission has just announced that they have filed an emergency action and obtained a restraining order against two offshore entities conducting the alleged unregistered digital token sale of Telegram.
Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold
Said, Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. It seems that the messaging application sold around 2.9 billion tokens at discounted prices at around 171 initial purchasers. Some of those purchasers were U.S. citizens and the SEC alleges that the defendants failed to register their offers and sales of Grams, violating the Securities Act of 1933.
We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token
Said, Steven Peikin, Co-Director of the SEC’s Division of Enforcement. The tokens issued by Telegram are supposed to be distributed by October 31st.
The team behind the project hasn’t really given many details to the public since the initial launch of the first offering, which was canceled eventually. Telegram has remained quiet about this SEC announcement too.
This puts the entire project in jeopardy as some of the biggest cryptocurrency companies have already invested heavily in Gram tokens. Coinbase Custody, for instance, recently announced they will be supporting the Gram tokens.