U.S. SEC halts Telegram’s $1.7 billion digital token offering By Reuters

© Reuters. The Telegram app logo is seen on a smartphone in this illustration

NEW YORK (Reuters) – U.S. authorities said on Friday they have halted a $1.7 billion unregistered digital token offering by the messaging service Telegram Group Inc and its TON Issuer subsidiary.

The Securities and Exchange Commission said it had received a temporary restraining order against the two offshore entities, which the regulator said had failed to register to sell 2.9 billion digital tokens called “Grams” to initial investors globally, including 1 billion to U.S. buyers. The move marks the latest effort by the agency to crack down on the fledgling cryptocurrency industry.

The SEC has taken the position that initial coin offerings are securities offerings and therefore subject to SEC offering rules, which require firms to file registration and disclosure documents.

“Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a statement.

Telegram promised to give the coins to buyers when it launched its blockchain by Oct. 31, when the purchasers and the company would be able to sell them into U.S. markets, the SEC said.

A lawyer for the companies did not respond immediately to requests for comment.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.