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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Jayashree Ingle
CBW - External Analyst
INDIA