Messenger service provider company, Telegram has been revealing bits of its digital token project since two years ago. It has been secretive until it started selling its digital token earlier this month.
However, U.S. Securities ad Exchange Commission (SEC) announced on Friday that it has secured an emergency restraining order. The restraining order halts Telegram Group and its partner, TON, from issuing their token sale.
Telegram and TON has reportedly sold their token and gained $1.7 billion token sale. The amount of token sold was 2.9 billion gram tokens. The company sold them“at discounted prices to 171 initial purchasers worldwide,” according to the announcement.
Steve Avakian, Co-Director of the SEC’s Division of Enforcement stated:
“Our emergency action today is intended to prevent Telegram from flooding the U.S. 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.”
Steven Peikin, another Co-Director of SEC added:
“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.”
Telegram token, the long-term blockchain project with TON
The messenger company has started its blockchain project for a while. Earlier this month, it revealed that it is working with Telegram Open Network (TON) for the blockchain project.
Investors purchased gram tokens at a price of $0.37 and $1.33 per unit in February and March 2018, respectively. Code for TON Blockchain Node was released in early September. And investors received an email containing TON’s key generator link on Oct. 2. TON Blockchain has set to start operation no later than Oct. 31.
However, with sudden halt by SEC, the company’s plan to go live by October 31 might not be happening at all.