Telegram to Pay Fine, Return Investor Money to Settle US SEC Charges

Telegram has agreed to return $1.2 billion (GBP 972.84 million) to traders and pay an $18.5 million civil penalty to resolve costs over an unregistered digital token coin providing, the US Securities and Exchange Commission (SEC) mentioned on Friday.

The regulator in October halted a $1.7 billion digital token providing by the agency, which is greatest identified for its messaging app, saying Telegram had raised capital to finance its enterprise by promoting 2.9 billion “Grams” to international traders. The SEC mentioned in an announcement on Friday it had obtained courtroom approval of the settlements with Telegram and its TON Issuer subsidiary.

Telegram neither admitted to or denied the SEC’s allegations.

The company has been in search of to crack down on the fledgling cryptocurrency trade. SEC has taken the place that preliminary coin choices are securities choices and due to this fact topic to SEC providing guidelines, which require firms to file registration and disclosure paperwork.

“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,” mentioned Kristina Littman, chief of the SEC Enforcement Division’s cyber unit.

Because Telegram missed a deadline to launch its TON platform because of a courtroom injunction, the agency needed to return funds to purchasers, Telegram mentioned in an announcement, saying it had already returned $1.2 billion to purchasers both straight or within the type of loans.

“We hope the regulatory environment for blockchain technology in the US becomes more favorable for others in the future,” it mentioned.

© Thomson Reuters 2020

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