The US Securities and Exchange Commission (SEC) is definitely not wasting its time when it comes to slashing ICO dreams. The financial regulatory body, after rejecting another Bitcoin ETF application, went on to file a legal complaint against the messaging app Telegram and its Telegram Open Network or TON. The reason? The unregistered ICO of TON.
According to the defendants, the currency GRAM is the digital asset without which the Telegram platform and TON blockchain will have no value. The SEC now thinks the offering constituted an illegal sale of securities, an act for which prosecution is appropriate. The ICO collected over $1.6 billion.
The testing of the TON blockchain network have already begun. However, the SEC views GRAM as securities and their sale was illegal. This is what the complaint went on to say that the TON ecosystem did not actually exist and does not exist even now. The SEC stated that there are no services or products that can be bought with the tokens.
An interesting fact is that Telegram offered the GRAM token to professional investors, hence the $1.7 billion were funded exclusively by around 170 investors. The issue here, according to the SEC, is that these investors were made to believe that the token will be a sustainable, profitable investment in the long-run. However, no such promise can be made.
Furthermore, what has allegedly been promised is that these GRAM tokens will generate a 10 to 50x return, which led an investor to buy $27.5m of these digital coins.
On the other hand, TON’s representatives talked about resolving the entire SEC issue and the possible delay of the currency after all. The court hearing is scheduled for 24th of October.