Editor's Note: Part of this article comes fromcryptopotato, author George Georgive, also compiled by Odaily Wang.
On October 12, according to foreign media "Fox Business Report", the Securities and Exchange Commission (Securities and Exchange Commission) on Friday took emergency action against the messaging application Telegram to prevent it from continuing to issue unregistered digital currencies.
Since January 2018, Dubai-based Telegram has sold about 2.9 billion digital coins to 171 buyers at a discount, and investors have raised more than $1.7 billion for the project, SEC officials said. Among them, the number of American buyers was 39, and the investment from American investors was about 424.5 million US dollars.
The cryptocurrency owned by Telegram is called "Grams". The SEC stated that Telegram and its wholly-owned subsidiary Telegram Open Network (also known as "TON Blockchain") did not register the sale of Gram. The SEC regards it as a security. Not currency. The SEC said it had received a temporary restraining order against the two offshore companies.
However, Telegram disputed this, saying that, according to relevant court records, the category of Grams is "currency," not "securities."
In response to this, CNBC host Ran NeuNer tweeted that according to his calculations, Telegram needs to pay $10.2 million to the SEC. Block.One paid a $24 million civil penalty (0.58 percent) for a $4 billion ICO; Telegram raised $1.7 billion, or roughly $10.2 million at a 0.58 percent rate.
(Odaily note: SEC previously accused Block.One of conducting unregistered securities transactions, raising a total of 4.1 billion US dollars within one year, and must pay a fine of 24 million US dollars, which is 0.58% of the total amount of this ICO.)
But is it really possible to calculate like this? How is the nature of TON’s case different from that of Block.One?
In order to answer this question, CryptoPotato hereby consulted Tomer Ravid, CEO of BloxTax, who made a brief analysis of the differences between the two incidents.
According to Ravid’s introduction, the main difference between the SEC’s complaints against TON and Block.One lies in whether the two conducted other businesses before conducting the ICO. Block.One hardly had any other business before the ICO, therefore, Block.One has nothing to disclose to the public. However, Telegram is a technology giant that has been operating for a long time and has a wide range of businesses, with more than 200 million monthly active users. Some people even joked: "If Telegram were a country, it would be the sixth most populous country."
With such a huge user base, the SEC believes that Telegram should disclose more information to the public.
In addition, Ravid also said that the SEC’s allegations also mentioned the possibility that Telegram may have defrauded investors, but the SEC’s allegations against Block.One did not mention fraud at all, which is also the difference between the two cases. place.
Finally, Ravid pointed out that the SEC's charges against TON are actually quite similar to his charges against Kik (Odaily Note: Kik is an instant messaging application in Canada that is currently very popular among teenagers in the United States. In June this year, The SEC issued a press release announcing a formal lawsuit against Kik for illegally selling security tokens to U.S. investors). Ravid said that Kik was also prosecuted by the SEC for lack of disclosure information and failure to disclose the information required for investment decisions to reasonable investors. Ravid believes that in KIK's case, this is also the basis for accusing Kik of defrauding investors.
At present, there is no new development in the TON incident, but it is clear that the SEC is stepping up efforts to severely crack down on companies that try to enter the US capital market through ICO or other forms of token sales.
