February 20, 2024

TON under attack: SEC accuses Telegram of illegal ICO

The American regulator dealt an unexpected blow to the upcoming TON blockchain, accusing Telegram ofunregistered sale of tokens a year and a half after the ICO.

The US government seems to believe that corporatecryptocurrencies are more dangerous than public blockchains. Until now, all the complaints from regulators and politicians have rained down on Facebook for the Libra project, and a similar development by Telegram, which began with the sale of tokens in January and March 2018 for $1.7 billion, has still remained in the shadows. But this silence proved to be deceptive.

On the evening of Friday, October 11, the SEC requiredfreeze the sale of Gram tokens and accused two companies — Telegram Group Inc. and its “daughter” TON Issuer Inc. in the unregistered sale of tokens and insufficient information to investors. The corresponding press release was posted on the SEC website.

According to the press release, these organizations sold 2.9 billion Grams tokens at discounted prices to 171 investors, with 1 billion Grams sold to 39 buyers in the US. In addition, after the launch of the blockchain, which should take place no later than October 31, tokens can go on free sale to all US citizens.

The SEC states that the above companies have not registered the sale of tokens, which are securities, which violates the Security Act of 1933.

SEC Enforcement Division Director Stephanie Avakian stated:

"We must act immediately toprevent the American market from being flooded with illegally distributed tokens. We allege that defendants failed to provide investors with necessary information regarding their business operations, financial condition, risk factors and the requirements of the securities laws.”

Her colleague Steven Peikin added:

“We have repeatedly warned that issuersSecurities cannot circumvent laws by simply calling them digital tokens or cryptocurrency. Telegram decided to take advantage of the public offering of securities without the appropriate disclosure of information required to protect investors. ”

After such accusations, the prospects for the TON projectwill be seriously shaken. This probably will not lead to a cancellation or long delay in the launch of the blockchain if the development is truly in its final stages. But the legal status of the project and Gram tokens now looks questionable, since until the SEC charges are dropped, investors will not be able to legally dispose of the tokens. Moreover, now investors who doubt the future of the project will have a legal basis to demand the return of their investments. And the obstacles erected by regulators will force other corporations planning to issue tokens to think about the feasibility of developing such initiatives.