9.9 C
Amsterdam
29 March 2024
PumpMoonshot
Image default
News

Telegram Set to Pay $18.5 Million in an Agreement with the SEC


In what seems to be the end of a legal battle between the U.S. Securities and Exchange Commission (SEC), and the messaging giant Telegram, the latter is expected to pay a civil penalty of $18.5 million to the SEC and $1.2 billion disgorgement fee according to a proposed agreement.

Telegram Agrees to Pay Disgorgement and Civil Penalty

The U.S. SEC filed a proposed final judgment with the U.S. District Court of Southern District Of New York on Thursday (June 25, 2020). According to the court filing, the SEC revealed that both the Commission and Telegram reached a settlement agreement on June 11, 2020.

In the settlement reached by the two parties, Telegram is to pay disgorgement of $1.2 billion.  Out of the total disgorgement, $1.19 billion serve as “termination amounts” to investors per the contract for the purchase gram tokens. The messaging platform has four years to pay investors the termination amounts. 

Also, the company agreed to pay the SEC a civil penalty of $18,500,00, with the regulator giving the company 30 days to pay the penalty fee if the court approves the judgment. According to the SEC court filing:

“Amounts ordered to be paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the government for all purposes, including all tax purposes”

In addition to civil penalties and disgorgement, the filing stated that Telegram would have to notify the U.S. securities regulator before conducting any crypto token sale for the next three years. Accordingly, the company will inform the SEC 45 days before issuing any “digital tokens” or “cryptocurrencies.” You Might Also Like:

  • Telegram Postpones The Release Of Gram Tokens Until April 2021, Offers To Refund Investors
  • Telegram Can’t Sell GRAM Tokens Even Outside The US, Judge Clarifies
  • Telegram Won’t be Able To Issue GRAM For Now, As Court Sides With SEC

Commenting on the latest Telegram/U.S. SEC development was Jake Chervinsky, General Counsel for the decentralized lending platform, Compound. The crypto lawyer, in a tweet, said:

“Telegram’s SEC settlement seems fair given the facts & circumstances surrounding the TON project & Grams offering (which were very bad for Telegram), but sadly ends this saga on a confused District Court opinion re: Howey. Many of us hoped the Court of Appeals would weigh in.”

The Long Battle With the SEC

Back in 2018, Telegram raised over $1.7 billion from investors in an initial coin offering (ICO) for the development of its blockchain project, the Telegram Open Network (TON). However, Telegram’s battle with the SEC started when the U.S. securities regulator stepped in to halt the sale of its gram tokens. According to the SEC, Telegram’s gram tokens were considered as securities, which in turn meant that the 2018 ICO event went afoul of the law. 

Later in January 2020, the SEC sought a court order to access Telegram’s financial records, which the company refused to submit to the commission. In the same month, the New York Southern District court dismissed the SEC’s order to view Telegram’s ICO financial records. 

A court injunction later in March prevented Telegram from issuing its gram tokens after the tokens considered securities according to the Howey Test. After so many hiccups, the company postponed the release of its gram tokens and later closed the curtain on the TON project. 

News source

Related posts

TRON (TRX): First SUN token distribution will be on September 11th

PumpMoonshot

Grayscale’s Crypto Campaign Influenced BTC’s Break Through Above The $12000 Levels

PumpMoonshot

Former CEO of Binance ordered to hand over passports to US

PumpMoonshot
Verified by MonsterInsights