The US Securities and Exchange Commission announced court approval of settlements with Telegram to resolve charges that Telegram's unregistered offering of digital tokens called "Grams" violated the US federal securities laws. The company agreed to return more than USD 1.224 billion to investors and to pay an USD 18.5 million civil penalty.
In October 2019, the SEC filed a complaint against Telegram, alleging that the company had raised capital to finance its business by selling approximately 2.9 billion Grams to 171 initial purchasers worldwide. The SEC sought to enjoin Telegram from delivering the Grams it sold, which the SEC alleged were securities that had been offered and sold in violation of the registration requirements of the federal securities laws.
On 24 March of this year, the US District Court for the Southern District of New York issued a preliminary injunction barring the delivery of Grams and finding that the SEC had shown a substantial likelihood of proving that Telegram's sales were part of a larger scheme to unlawfully distribute the Grams to the secondary public market.
Without admitting or denying the allegations in the SEC's complaint, the company consented to entry of a final judgment enjoining them from violating the registration provisions of the Securities Act. Telegram is further required, for the next three years, to give notice to the SEC staff before participating in the issuance of any digital assets.
