After a period where Telegram kept assets valued at more than US$ 1.2 MM in reserve, it is now forced to return them to the SEC. Why?
Recently, the U.S. Securities and Exchange Commission (SEC) reached an agreement with the instant messaging company Telegram about a dispute existing since October 2019. The dispute concerns money put up by investors to fund TON, Telegram’s autonomous blockchain.
The company was ordered to return a part of the collected capital, so Telegram returns US$ 1.2 MM to the SEC, without admitting any fault.
The scope of the agreement: What does it consist of?
The agreement presented by the SEC consists in that Telegram, which had all the assets mentioned (US$ 1.7 MM) destined to the development of its own blockchain platform, must return 70% to the investors.
Approximately 171 investors participated in the ICO, expecting to see the emergence of the project by 2018, which after two delays in the launch was canceled.
This means that Telegram returns US$ 1.2 MM to the SEC (US$ 1.224 million to be exact). In view of this, Pavel Durov, Telegram’s CEO, highlighted that this agreement confirms its commitment to return the remaining funds to investors under the purchase agreements.
However, at the beginning of 2020 this willingness mentioned by Durov to return the money was not so evident. At that time, Telegram was still reluctant to disclose bank records of how the millions raised had been spent.
In addition to this returned money, Telegram will have to pay a civil penalty of US$18.5M, providing a 45-day notice if he tries to sell more tokens.
Under pressure from the SEC, the Telegram company has been forced to return the investment collected to develop its platform in the Blockchain.
Due to the pressure of the SEC, Telegram has been forced to return the investment collected to develop its platform in the Blockchain.
Telegram officially abandons trial with the SEC
TON, Telegram’s bet: The reversal
Telegram went beyond the launch of a new blockchain, as it also included the introduction of its own token, the Gram, to the market. With this digital currency, the company would carry out an ICO in order to finance the development of such platform.
Not everything went as expected. Since 2019, the SEC had been suing Telegram mainly on the grounds that its tokens were being sold illegally.
On the contrary, Telegram responded at the time by saying that there was nothing illegal about this. For the company, this was no more than a simple advance sale of the rights to own the future Grams.
In the end, with so much pressure against it, this company had to back out of its project and desist from it.
„Unfortunately, we were unable to launch the TON platform by the deadline due to the preliminary injunction ordered by the Court, and therefore had to return the remaining funds to the buyers under our contractual agreements,“ said Durov.
Majority of TON investors accept 72% refund
After his project was thrown overboard due to legal mishaps, Telegram has openly expressed his particular interest in actively pursuing new ideas for a better future. In that future, they are betting on cryptomonies.
„We look forward to continuing our other projects and avenues of Immediate Edge innovation, and hope that the regulatory environment for Blockchain’s technology in the U.S. will be more favorable for others in the future,“ concluded Durov.