26 Jun 2020 Morgan Hayze
Telegram To Pay $18,5 Million After An Agreement With SEC
One of the largest messenger platforms, Telegram, reached an agreement with the Securities and Exchange Commission (SEC) on 11th June, which seems to end the two-year-long saga between the messaging giant and the regulator.
The SEC filed its final judgment proposal with the U.S. District Court of Southern District Of New York on June 25th, as a logical continuation to the settlement agreement from June 11. In the agreement, Telegram is obliged to pay $1,2 billion disgorgements, $1,19 billion of which will be allocated as “termination amounts” towards investors who bought Gram tokens in Telegram’s ICO sale. Telegram has no more than four years to return funds to investors. Also, Telegram has 30 days to pay its $18,5 million fee, if the U.S. District Court of Southern District Of New York agrees to the proposal by the SEC.
“The $18,5 million civil fine shall be treated as government-paid penalties, for all purposes including taxes.” the agreement reads.
Also, Telegram has to inform the SEC about conducting any further crypto token sale in the next three year period. Accordingly, Telegram has 45 days to notify the financial watchdog about an upcoming issuance of “digital tokens” or “cryptocurrencies”.
The agreement may be the final step before the end of a two-year-long legal battle between the SEC and Telegram. Back in 2018 Telegram managed to raise over $1,7 billion in an ICO for its Telegram Open Network (TON). However, the U.S. financial regulator accused Telegram for “selling unregistered securities”, which means Telegram’s 2018 ICO was “against the law”.
The saga continued in 2019 and 2020, with the SEC filing in and obtaining a court order to access Telegram’s records in January 2020, which Telegram refused to grant. During the same month the U.S. District Court dismissed the order for accessing Telegram’s financial records.
The final push of the SEC was preventing Telegram from issuing its GRAM tokens, as the tokens were considered as securities via the Howey test. Telegram postponed the token distribution several times and later, they completely shut down the TON project.ICO news Blockchain Altcoin News SEC ICO token tokens altcoin tokensale SEC Security and Exchange Commission ICO regulation United States us economy Securitization Regulation Securities Government Politics USA US Regulations Telegram Gram