- The US Securities & Exchange Commission granted redactions to a majority of participants in Telegram’ 2019’s initial coin offering (ICO).
- It started raising capital from January 2018 and has accumulated funds to the tune of $1.7 billion.
- According to the judgment, a lot of files will permanently seal to protect the non-parties in the alleged sale of digital tokens.
The US Securities & Exchange Commission granted redactions to a majority of participants in Telegram’ 2019’s initial coin offering (ICO). Telegram did not comply with the disclosure responsibilities regarding the financial condition, risk factors, and top-level management.
Following this, the SEC had to immediately halt the process of initial coin offering by Telegram Group Inc.’s wholly-owned subsidiary, TON Issuer Inc. It started raising capital from January 2018 and has accumulated funds to the tune of $1.7 billion. The emergency press release filed on 11th October 2019.
A total of 171 purchasers had provided funds from all over the world. Telegram had plans to launch its own cryptocurrency ‘TON Blockchain’ and sold $2.9 billion tokens. The firm promised to sell the tokens at a premium no later than 31st October 2019.
Telegram Vs. SEC
Stephanie Avakian, co-director of SEC’s Division of Enforcement, stated that the tokens unlawfully sold and that the firm seeks benefits of digital currency without complying with disclosure parameters.
They protect the general public from loss of funds and help in the recovery process. Telegram Group Inc did not file a single registration statement with the SEC required for the public offering.
In March 2020, a landmark injunction passed, which debarred the online messaging application from going ahead with the sale. As the defendants were involved in the sale of unregistered securities, they could face a jail term up to 5 years or fine. They even promised to set up one of the fastest open-source blockchain network’s presence in the digital space.
In the latest developments in the famous filing, the investors are ready to cooperate with the SEC and have been approved redactions. It is a process where the investors will be provided a dozen documents to incorporate necessary changes required by the law.
According to the judgment, a lot of files will permanently seal to protect the non-parties in the alleged sale of digital tokens. Thus the redactions can narrowly accept the requests placed by the SEC encouraging other venture capitalists’ or investors too to cooperate with the regulator.