Telegram Group Inc has agreed to return $1.2 billion to investors and pay an $18.5 million civil penalty to resolve charges over an unregistered digital token coin offering, the US Securities and Exchange Commission (SEC) said on Friday.
- Telegram has agreed to return $1.2 billion to investors and pay an $18.5 million civil penalty to resolve charges over an unregistered digital token coin offering
- The regulator in October halted Telegram’s $1.7 billion digital token offering
- The company neither admitted to or denied the SEC’s allegations
The regulator in October halted a $1.7 billion digital token offering by the firm, which is best known for its messaging app, saying Telegram had raised capital to finance its business by selling 2.9 billion “Grams” to global investors. The SEC said in a statement on Friday it had obtained court approval of the settlements with Telegram and its TON Issuer subsidiary.
Telegram neither admitted to or denied the SEC’s allegations.
The agency has been seeking to crack down on the fledgling cryptocurrency industry. SEC has taken the position that initial coin offerings are securities offerings and therefore subject to SEC offering rules, which require companies to file registration and disclosure documents.
“New and innovative businesses are welcome to participate in our capital markets, but they cannot do so in violation of the registration requirements of the federal securities laws,” said Kristina Littman, chief of the SEC Enforcement Division’s cyber unit.
Because Telegram missed a deadline to launch its TON platform due to a court injunction, the firm had to return funds to purchasers, Telegram said in a statement, saying it had already returned $1.2 billion to purchasers either directly or in the form of loans.
“We hope the regulatory environment for blockchain technology in the US becomes more favourable for others in the future,” it said.
The team at Platform Executive hope you have enjoyed the ‘Telegram to pay $18.5 million, return investor money to settle SEC charges‘ article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Chris Prentice; editing by Diane Craft and Jonathan Oatis.