There is a big battle between Telegram and SEC as Telegram refuses to share details about its ICO that is coming up with SEC.
The war dates back in 2018 when Telegram had two token sales and raised over $1.78B in an attempt to launch its network Telegram Open Network (TON) blockchain. SEC had issues with it with allegations of failing to comply with the agency regulations. Telegram raised the funds using Simple Agreement for Future Tokens (SAFT) whereby the Telegram promised 171 investors to give them tokens once the project is launched. It has been a long court battle that pushed Telegram to postpone the launch of the TON blockchain.
The unending war
SEC has an issue with Telegram with claims that even with the launch of its token Gram, telegram did not comply with the registration requirements. This has pushed SEC to be stricter as it is very likely that Telegram will still not comply. SEC demanded all financial records for the last two years of which Telegram has declined to submit.
SEC wanted any records that are connected with the token sale that was done way back in 2018. Every detail is required including the source of funds, investor details, amounts of money and how the money was spent. Telegram has failed to share that information with SEC and that has been the main source of war.
According to SEC, they had to make that move in an attempt to curb money laundering and hence wanted to know the intentions of Telegram with the raised money and its plan with the TON blockchain.
US regulator SEC stopped Telegram’s ICO in October since not only did the company conduct securities sale without compliance but also it did not provide investors with adequate information on the company’s financial status. After suspending the ICO, SEC demanded that the organizer of the ICO to provide documents as evidence of how the money raised from the former ICO was spent.
That made Telegram to postpone the launch of the TON blockchain and distribution of Gram tokens until it sorts it issues with SEC. The launch was pushed from October 31, 2019, to April 30, 2020. Initially, the company had agreed to refund investors if it fails to launch the blockchain in October but that did not happen as investors are okay to wait for April.
According to Telegram, even when Gram tokens get launched it will not be securities according to SEC rather it will be a currency/commodity.