Netease Technologies News, Oct. 12, according to foreign media reports, the U.S. Securities and Exchange Commission (SEC) announced on Friday that it had filed an urgent lawsuit against two offshore entities that issued unregistered digital tokens in the United States and overseas, and obtained a temporary restraining order. It is reported that the relevant entities have raised more than $1.7 billion through the issuance of digital tokens.
According to the SECs allegations, Telegram Group and its wholly owned subsidiary, TONIssuer, began raising funds in January 2018 to finance the businesses of the two companies, including developing their own block chains, Telegram Open Network or TON Blockchain, and mobile messaging application Telegram Messenger. The defendant sold about 2.9 billion digital token Grams to 171 initial buyers worldwide at a discount price, of which more than 1 billion Grams were sold to 39 American buyers. Telegram promises to distribute Grams to buyers before the block chain goes online on October 31, 2019, when buyers and Telegram will be able to sell billions of digital tokens to the U.S. market. The complaint alleges that the defendant failed to register Grams in accordance with the Securities Act of 1933.
The urgent action we are taking today is to prevent Telegram from issuing illegal digital tokens in the U.S. market, said Stephanie Avakian, co-head of SEC law enforcement. We allege that the defendant failed to provide investors with information on Grams and the management information required by Telegrams operations, financial position, risk factors and securities law.
Steven Peikin, co-head of SEC law enforcement, said: We have repeatedly said that issuers cannot circumvent federal securities laws by labeling their products with encrypted currencies or digital tokens. Telegram seeks to benefit from public offerings without complying with its obligations to protect the investor community.
The SEC filed a lawsuit today in the Federal District Court of Manhattan, accusing two defendants of violating the registration requirements of Securities Act Section 5 (a) and Section 5 (c) and seeking a permanent injunction and related civil penalties. (Chen Chen)
Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541