The United States Securities and Exchange Commission (SEC) announced today that it has filed an emergency action and obtained a temporary restraining order against Telegram Group Inc. and its wholly-owned subsidiary, TON Issuer Inc.
The SEC alleged that Telegram and its subsidiary had started raising investors funds since January 2018 by selling unregistered securities in the U.S. and overseas to fund the development of its blockchain, and the message platform Telegram Messenger.
The regulator further stated that since the start of the token offering, Telegram had sold approximately 2.9 billion digital tokens called “Grams” at discounted prices to 171 initial purchasers worldwide, including more than 1 billion Grams to 39 U.S. purchasers.
Telegram, as Coinfomania reported, had promised to deliver Gram tokens to investors before the end of October 31, 2019, but the SEC has now stepped in a move designed to stop billions of Gram tokens from entering the U.S market.
Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement said in the SEC release:
“Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold. We allege that the defendants have failed to provide investors with information regarding Grams and Telegram’s business operations, financial condition, risk factors, and management that the securities laws require.”
The SEC says it is seeking emergency relief, as well as permanent injunctions, disgorgement with prejudgment interest, and civil penalties from Telegram.
Notably, this is the second blockbuster lawsuit brought against a highly-rated crypto project by the SEC in less than a month. Coinfomania reported in September that the regulator settled charges with EOS.IO developer, Block.one for a similar offense.