US SEC Commission imposes injunction on Telegram's Gram cryptocurrency

The United States Securities Commission (SEC) has secured a temporary injunction against the structures of Telegram founder Pavel Durov.

The Commission filed a lawsuit in the Manhattan District Court against the Virgin Islands-registered Telegram Group Inc. and its “daughters” TON Issuer Inc., in which it requires to withdraw all funds raised from investors in the Gram cryptocurrency project in state revenue.

Recall that Telegram managed to raise $ 1.7 billion from 171 investors, selling about 2.9 billion Gram tokens. There are 39 investors in the USA who have invested $ 850 million, follows from the Telegram application filed with the SEC.

Stefani Avakyan, Co-Head of SEC Enforcement Operations, said:

"Our measures are aimed at preventing Telegram from inflicting digital markets with American tokens, which, in our opinion, were sold illegally."

“We believe that the defendants did not provide investors with information about the Gram, Telegram's business operations, financial condition, management and risk factors, as required by law,” she said.

The SEC requires a permanent injunction banning the sale of Gram and withdrawing funds received from unlawful transactions to the state’s income, as well as “interest for the period until the court decision”.

Following the court decision on an injunction against Telegram structures, a statement appeared on the official Telegram Open Network (TON) channel to suspend the project.

“This decision is dictated by the increased level of uncertainty in regulation.”

The TON Board team deleted all previous messages, leaving only a promise to keep up to date.

What will happen to the project now?

According to the decision of the SEC and the Manhattan court, Telegram can no longer distribute Gram tokens in the United States. And here the main question arises – can Durov give out tokens to investors? If this does not happen before October 31, people will get the right to demand their money back.

(2/3) TON must go live before the 31st October to avoid having to refund investors in the amount of USD 1.7bn.

By that point, Telegram would be unable to comply with relevant regulation. pic.twitter.com/IcKuTsbUfY

– Binance Research (@BinanceResearch) October 12, 2019

On the one hand, the SEC decision only contains a ban on resale and distribution in the secondary market, which excludes a ban on payments to investors. However, the research unit of Binance Research claims that the ban applies to this.

In the latter case, Durov may have real problems, because he will have to not only look for $ 1.7 billion, but also money for fines. Let's hope that Durov can get out of this situation, otherwise there will be no talk of any Telegram cryptocurrency.

Publication date 10/13/2019
Share this material on social networks and leave your opinion in the comments below.