The Curtain Drops on Courtroom Drama of Telegram and SEC with $1.2 Billion Settlement
After a nine-month-long legal tussle between Telegram and the Securities and Exchange Commission (SEC) which was going on since October 2019, has ended with a settlement of $1.2 billion on June 26.
According to the court’s final judgment passed by Judge Kevin Castel, in the New York Southern District court, Telegram will have to reimburse up to $1.2 billion to the TON investors and will have to pay $18.5 million civil penalties to settle the charges over its unregistered GRAM token.
Telegram has agreed to repay the settlement amount to the investors and also has agreed to pay the civil penalties to the Commission.
The SEC had demanded a million dollars penalty from other defendants as well who were closely associated with the lawsuit.
The Commission has closely been monitoring crypto companies in the past two years and is handling the fraudsters stringently to overcome financial irregularities. The Telegram had been denying to admit their Gram token as initial coin offering and was claiming it as cryptocurrency.
Official Statements from SEC and Telegram
While commenting on the court judgment, Kristina Littman, Chief of SEC Enforcement Division’s cyber unit said:
“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.”
Due to the legal bindings of the court injunction, Telegram has missed its scheduled launch of the TON platform, so it also has to return the investments to the purchasers. While commenting on this issue, Telegram has claimed that it already has returned $ 1.2 billion to purchasers directly or through loans.
It further stated, “We hope the regulatory environment for blockchain technology in the US becomes more favorable for others in the future.”
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CBW - External Analyst