Telegram can finally make peace with the SEC
- Telegram and the US SEC seem to have finally reached an agreement that could end their lengthy legal battle.
- According to the SEC's filing Telegram has to pay $1.2 billion to its investors, and $18.5 million to the SEC.
- Telegram also has to notify the regulator if it continues its token sale or if it issues new tokes or cryptos.
After months of uncertainty, Telegram seems to finally be at the end of its conflict with the US SEC. The company is in front of a decision that could end up resolving the legal battle, and it all comes down to two payments.
One of the payments that the company is expected to make is a civil penalty to the SEC itself, which is supposed to be $18.5 million. The second one is a $1.2 billion disgorgement fee, which the regulator’s agreement is proposing.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
The SEC’s new proposal to end a 2-year-long legal battle
The regulator filed the proposal yesterday, June 25th, with the District Court of Southern District of New York. The filing revealed that the SEC managed to reach an agreement with Telegram fairly recently, on June 11th of this year.
Telegram is to pay $1.19 billion, which the regulator classified as ‘termination amounts’ for investors who purchased the project’s token, Gram. According to the agreement, Telegram has a four-year deadline to pay the mentioned amount.
Telegram also agreed to pay a civil penalty to the SEC itself, as mentioned. The deadline for this payment is much shorter — only 30 days, provided that the court will approve of the judgment.
Other conditions of the agreement
Additionally, Telegram will have to notify the SEC if it decides to continue with its token sale at any point over the next three years. And, if it decides to issue new cryptos, it has to notify the SEC as well, and 45 days in advance, at that.
As many may already know, Telegram held a massive token sale in 2018, during which it managed to raise a total of $1.7 billion from investors around the world. The funds were meant to be used for the development of the project’s TON (Telegram Open Network) blockchain.
However, the development was cut short when the SEC stepped in, and accused Telegram of selling illegal securities. This was when the two got locked in a battle that lasted until now, when they finally seem to have reached an agreement.