TON on the verge of collapse: SEC through the court seeks to suspend the project from Telegram

The US Securities and Exchange Commission (SEC) announced that it was taking “extraordinary measures and restrictions” regardingtwo offshore companies associated with the Telegram Open Network (TON) token sale. This was reported on the website of the department.

The Commission believes that Telegram is illegaldistributed unregistered digital tokens in the United States and abroad, thanks to which the company managed to raise $ 1.7 billion. Telegram Group and TON Issuer Inc. sold at a reduced price “approximately 2.9 billion digital tokens called Gram 171 to the original buyer. In particular, 1 billion tokens were sold to 39 American buyers. ”

Telegram committed to deliverGram coins to original buyers until October 31. At the same time, the SEC claims that Telegram and TON Issuer Inc. offered investors securities without properly registering token sale and without disclosing material information.

“The emergency measures we have taken to prevent the flooding of the US market with digital tokens, which, in our opinion, were sold illegally- said SEC co-director of law enforcement SEC Stephanie Avakyan. -We submit that the defendants failed to provideinvestors complete information about Gram, Telegram’s business operations, its financial condition, risk factors and management, as required by securities legislation"

Representative of the same unit Stephen Paykinnoted that Telegram seeks to benefit from the initial offer, not observing the long-established requirements for the disclosure of information aimed at protecting the rights of investors.

“We have repeatedly stated that issuers cannot escape the action of federal securities laws by simply calling their product a digital token.”- he emphasized.

According to filed with Manhattan Federal Courtthe statement, the SEC accuses both companies of violating sections 5 (a) and 5 (c) of the Law on Securities and demands an unlimited injunction against the project and a decision to return funds to investors with a fine and interest.

A lawyer specializing in the cryptocurrency industry, Catherine Wu, noted that the SEC’s order is not final and the satisfaction of the agency’s requirements will depend on the court’s decision.

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“Please note that the SEC is seeking an immediate suspension of the distribution of Telegram tokens, due on October 31”

According to researchers at Binance Research, at leastTON token sale was carried out in accordance with rule 506 (c), assuming that all buyers must be accredited investors, this rule does not apply to the secondary market and the sale of new Gram tokens.

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ForkLog previously posted a lot of material abouttechnical and economic features of TON, possible problems on the way to its full implementation, as well as its similarities and differences with Libra from Facebook.