SEC halts USD 1.7 bln. unregistered digital token offering

WASHINGTON, The Securities and Exchange Commission (SEC) announced Friday that it has filed an “emergency action” and obtained “temporary restraining order” against two offshore entities “conducting an alleged unregistered, ongoing digital token offering in the US and overseas that has raised more than USD 1.7 billion of investor funds.” The SEC said in a statement that about 2.9 billion digital tokens called “Grams” were sold “at discounted prices to 171 initial purchasers worldwide, including more than one billion Grams to 39 US purchasers.

It added, “Telegram promised to deliver the Grams to the initial purchasers upon the launch of its block chain by no later than October 31, 2019, at which time the purchasers and Telegram will be able to sell billions of Grams into US markets.” “The complaint alleges that defendants failed to register their offers and sales of Grams,” according to the statement.

Co-Director of the SEC’s Division of Enforcement Stephanie Avakian said in this regard “our emergency action today is intended to prevent Telegram from flooding the US markets with digital tokens that we allege were unlawfully sold.” She added, “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.”

Source: Kuwait News Agency