The U.S. SEC has recently been strengthening its supervision of the cryptocurrency circle. After repeatedly suppressing Libra and rejecting several ETF proposals, the U.S. SEC is eyeing the 1.7 billion new project TON (Telegram Open Network) of the well-known encrypted communication software Telegram.
October 11,A recent document on the official website of the US SEC shows thatThe US SEC has taken urgent action against two unregistered Telegram Group and its wholly-owned subsidiary TON Issuer, which issued digital currencies in the United States and overseas. The SEC will urgently initiate a temporary restraining order against the two companies.
Although Telegram, which focuses on encrypted communication, is not as big as Facebook, it can be regarded as an Internet celebrity seed player in the currency circle, with nearly 200 million users. Its latest blockchain project TON has set a historical record of US$1.7 billion in currency circle financing . With the support of top institutions, Telegram's entry into the blockchain market has attracted much attention, and its token Gram was also short-sold in an instant during the private placement round.
According to official SEC documents, the above two companies began to raise funds in January 2018 to finance businesses such as Telegram Open Network. Telegram sold about 2.9 billion Grams at discounted prices to 171 buyers around the world, of which Telegram sold more than 1 billion Grams to 39 U.S. buyers.
According to the SEC,Telegram promises to launch the TON mainnet and deliver Grams before October 31, 2019. At that time, buyers and Telegram will sell billions of Grams to the US market.
In the disclosed official documents, this move is considered to be an unregistered sale of securities products, which violates the provisions of the securities law.
Seeing this, the attitude of the SEC is not difficult to understand. To put it simply, in the view of the SEC, the essence of TON's upcoming Gram is a security, which needs to meet strict securities law requirements.
The US SEC tends to link profits with securities, and after being recognized as a security, it will be strictly regulated by regulators.
Stephanie Avakian, co-director of the SEC's enforcement department, further analyzed that the temporary restraining order against Telegram is to prevent Telegram from illegally selling a large number of tokens in the US market. She said the SEC accused Telegram of failing to provide investors with information about Gram and Telegram's business operations, financial condition, risk factors and management in compliance with securities laws.
The statement of Steven Peikin, another co-director of the SEC's Enforcement Division, somewhat supports the above statement: "We have stated repeatedly that issuers cannot circumvent the federal securities laws simply by labeling their products as cryptocurrencies or digital tokens. .Telegram is attempting to make a profit through a public offering of tokens without abiding by regulations that protect investors.”
The US SEC official website documents also show that the SEC has filed a lawsuit against two Telegram entity companies in the Manhattan Federal District Court. The plaintiff may hope to take a permanent injunction and civil penalties against Telegram.
