Telegram fined $18.5 million by the SEC and must return $1.2 billion raised in an ICO June 26, 2020 at 5 p.m. ET By Mark DeCambre

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On Friday, a judge approved a ruling in favor of the Securities and Exchange Commission for a settlement with Telegram Group Inc. and subsidiary TON Issuer Inc, both British Virgin Islands-based entities. The judgement resolves a longstanding dispute between the SEC and crpytocurrency-based firm Telegram after the regulator, back in October, barred telegram's ICO, or initial coin offering, which it viewed as unregistered securities and therefore disallowed by the regulatory body. ICOs were a popular form of capital raises by the cryptocoin and blockchain community during the height of the fervor around bitcoin BTCUSD, -0.28% BTC.1, -0.16%back in 2017. However, the SEC feared that such investments were dangerous to mom-and-pop investors because they appeared to circumvent traditional rules and methods of raising money from the public. Telegram's ICO has agreed to pay back $1.2 billion to investors as part of the civil penalty. U.S. District Judge P. Kevin Castel, who was overseeing the case, approved the settlement. The startup, founded by two Russian brothers, Pavel Durov and Nikolai Durov, had created a groundswell of enthusiasm over the mobile-messaging application. Funds from the ICO were intended to build out the Telegram Open Network, which touted some 200 million users back in 2018. Telegram has since said that it would cease work on the project. "Since we saw limited value in pursuing the court case further, we welcomed the opportunity to resolve it without admitting or denying our liability," Telegram officials said in a statement.



Submitted July 01, 2020 at 01:02AM by eagleocean https://ift.tt/2NMTFXS

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