When it looked that everything was ready for Telegram to thrive in the crypto world with its gram token, a significant roadblock is now on its way, at least in the United States. A development occurred this week that will make the famous privacy-oriented messaging app to halt the development of its coin in American soil.

The United States’ SEC (Securities and Exchange Commission,) one of the most prominent financial watchdogs in the country, has secured an emergency restraining order that will make Telegram and its TON network stop the issuance of the token in the nation, over irregularities in its $1.7 billion ICO (Initial Coin Offering.)

The financial regulator announced in the last few hours that after filing for the emergency restraining order, it was granted it on Friday night. Telegram will now be unable to sell or distribute its gram tokens in American territory. The initial plan was for the network to be up and running on October 31st, but it is now unclear if that date will be met, as Telegram has not yet published its stance.

Telegram “Did Not Register its Offer”

According to the complaint, Telegram failed to register its offer. The company sold nearly 3 billion gram tokens (2.9 to be precise) “at discounted prices to 171 initial purchasers worldwide,” per the release. Of that total, more than a third (1 billion) was sold to American investors.

Stephanie Avakian, who is currently the Co-Director of SEC’s Division of Enforcement, issued a statement in which she observed that the measure taken in the last few hours is “intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold.”

According to Avakian, Telegram did not offer information to investors about its own operations and the gram token. Steven Peikin, another SEC co-director, also weighed on the matter and said that the law must be followed, so Telegram cannot operate in the United States.

“We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token. Telegram seeks to obtain the benefits of a public offering without complying with the long-established disclosure responsibilities designed to protect the investing public,” he explained.

More than a Year of Development

The TON network and the gram token have been in the works for more than a year, and the industry was already expecting its launch. The first whispers about the ICO began to swirl around in January 2018. Whilst, reportedly, the goal was to raise $600 million in a pre-sale and an additional $700 million in a public offering, the company managed to raise $1.7 billion.

And whilst speculation about the TON blockchain network and the gram token was in full fledge for months, the company has been very secretive about the details, only publishing the code in the last few weeks and only confirming its launch date to investors in an email.

The network is not yet functioning. On the other hand, a secondary market for the gram token has already been developed. Some specific, small crypto exchanges and OTC desks trading platforms are making promises to investors that they will have the tokens the moment they are issued. However, at least in the United States, that is not happening anytime soon.

By Andres Chavez

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