SEC halts Gram token offering. An emergency action filed and obtained temporary restraining order against Telegram Group Inc. and TON Issuer Inc.
According to SEC, the companies conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas. The offering has raised more than $1.7 billion of investor funds.
Defendants sold approximately 2.9 billion digital tokens called “Grams” at discounted prices to 171 initial purchasers worldwide, including more than 1 billion Grams to 39 U.S. purchasers.
“We have repeatedly stated that issuers cannot avoid the federal securities laws just by labeling their product a cryptocurrency or a digital token.”
The SEC’s complaint, filed today in federal district court in Manhattan. It charges both defendants with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act.
If SEC halts Gram Token so easily, other companies might have the same problem in the future too.