- SEC Orders the Standstill of Telegram’s $1.7 Billion Gram Token Sale.
- Failure to Register In Due Time Warrants Token-sale Halt.
Telegram is currently undergoing a major obstruction in launching its Gram tokens on the native TON network as the States Securities and Exchange Commission (SEC) issued a restrictive order on its token-sale terming it “unlawful.”
SEC has put a halt to telegram’s $1.7 billion Gram (GRM) token offering, the securities regulators have demanded that the messaging giant pause the sale of its digital currency which was termed unlawful.
Going by the press release issued by SEC on the 11th of October, the halt by SEC is due to Telegram’s failure to register its token-sale offering with the regulator on time. The Telegram group started working on its blockchain project known as Telegram Open Network (TON) since January 2018. However, the plans for the token-sale was re-organized due to some technical issues the company experienced last year.
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As of February 2019, Telegram sold about 2.9 billion Gram tokens at a promotional rate to 171 investors. Also, the token-sale consists of selling over 1 billion tokens to 39 U.S investors.
Failure to Register In Due Time Warrants Token-sale Halt
In the company’s statement, they promised all purchasers the ability to sell in the open market upon launching of the TRON blockchain and Gram tokens this month. The SEC confirmed that Telegram failed to register the token sale, as the regulators deem these Gram tokens as securities.
The co-director of the SEC’s Division of Enforcement, Steven Peikin, stated, “Our emergency action today is intended to prevent Telegram from flooding the US markets with digital tokens that we allege were unlawfully sold. We allege that the defendants have failed to provide investors with information regarding Grams and Telegram’s business operations, financial condition, risk factors, and management that the securities laws require.”
The Halt by SEC is going to cause a lot of financial damage to Telegram if they do not act fast, as they will have to refund the money gathered for the launching of the company fails to launch the first set of its Gram token by the end of this month.
If this should happen, the whole TRON blockchain will be in danger. Besides, several other crypto companies have started preparing for the launching of Gram tokens, crypto company Custody, recently announced its support for the Gram tokens. So far, Telegram has not issued any statement about the next line of action for the company, and the TON project.