Telegram Group along with its subsidiary “TON” was supposed to launch its network of gram tokens within the United States of America on October 31st, 2019. Days ahead of the official launch, however, the Securities and Exchange Commission (SEC) of the U.S has issued an emergency restraining order that directs the Telegram group to halt the sale of its $1.7 billion tokens effective immediately. As per the announcement on Friday, the network is no longer allowed to sell or distribute the tokens within the territory of the U.S until further notification.
1 Billion Gram Tokens Sold In The U.S
The SEC has also declared that as many as 2.9 billion gram tokens have been sold by Telegram so far to the initial 171 buyers from across the globe. The tokens were offered to these purchasers at a discounted price. A total of around 1 billion of these gram tokens were sold within the United States. As per the complaint, however, Telegram has been accused of not registering the sale of the gram tokens in the U.S.
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Ms. Stephanie Avakian, the current co-director for Division of Enforcement department of U.S Securities and Exchange Commission was reported to have said that the emergency action taken against Telegram is aimed at protecting the U.S markets from overflowing with the Telegram issued gram tokens, the sale of which has been labeled unlawful in the U.S. She further added that no amount of information, either about Telegram’s operations or the digital tokens at large, was provided to the interested investors.
Digital Tokens Must Abide By The U.S Federal Securities Laws
Mr. Steven Peikin, the fellow co-director has also come forward with a statement that putting a label of a digital token on the product doesn’t liberate the issuer from abiding by the U.S federal securities laws. The disclosure responsibilities have been in place for a long time and pledge to protect the investments of the public.
Telegram has been dedicated to the project for over a year. The initial plan was to raise $600 million during pre-sale followed by an additional $700 million once the public offering began, as reported by CoinDesk. As of March 2018, $1.7 billion of funds were raised by Telegram, according to the Form D disclosure that was filed with the Securities and Exchange Commission of the U.S.
Telegram Group published its network’s code in September of 2019 after keeping the project a secret for almost a year. The TON blockchain project was only made public earlier in October in an email that reassured the investors that the network is all set to go live by the end of the month, and informing them about the updated terms and conditions.