Telegram agrees to pay over $1.2 billion in settlement over its digital token Grams

The US Securities and Exchange Commission announced that its settlement with Telegram Group Inc. and its wholly owned subsidiary TON Issuer Inc. was approved in court. Telegram agreed to return over $1.2 billion to investors and to pay an $18.5 million civil penalty over its unregistered digital tokens offering Grams which violated the federal securities laws.

The SEC filed its complaint in October last year, alleging that the Telegram had sold approximately 2.9 billion Grams to 171 initial purchasers worldwide. SEC also alleges that the company sold Grams as securities in violation of the registration requirements of the federal securities laws.

In March 2020, the court issued a preliminary injunction and barred Grams and found that the SEC had shown a substantial evidence that Telegram’s sales were part of a larger scheme to unlawfully distribute the Grams to the secondary public market.

SEC penalty, fine

Lara Shalov Mehraban, Associate Regional Director of the New York Regional Office commented:

Our emergency action protected retail investors from Telegram’s attempt to flood the markets with securities sold in an unregistered offering without providing full disclosures concerning their project. The remedies we obtained provide significant relief to investors and protect retail investors from future illegal offerings by Telegram.

Telegram Group did not admit or deny SEC’s allegations, however the company agreed to return $1.2 billion to the investors from the profits from selling Grams. The company also agreed to pay $18.5 million civil penalty. As part of the settlement, the next three years Telegram Group is required to give notice to the SEC before participating in the issuance of any digital assets.

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