Telegram Group and its wholly-owned subsidiary TON Issuer agreed to return more than $1.2 billion in ill-gotten gains to investors to settle a complaint filed by the Securities and Exchange Commission (SEC).
In October last year, the SEC alleged that Telegram and TON Issuer conducted an unregistered digital token offering to raise capital for its business including the development of the TON Blockchain and Telegram Messenger.
In the U.S. alone, Telegram and TON Issuer allegedly sold more than one billion digital tokens called “Grams” to 39 investors. Worldwide, the defendants allegedly sold 2.9 billion Grams to 171 initial investors.
The defendants violated the registration provisions of the Securities Act of 1939 by failing to register the offering and sales of Grams, according to SEC in its complaint.
In March, the U.S. District Court for the Southern District of New York issued a preliminary injunction prohibiting Telegram Group and TON Issuer from selling Grams. The Court also determined that the SEC had substantial proof that the digital token offering was part of a bigger scheme to distribute Grams to the secondary public market.
