NY Judge signs Order halting offering of “Grams” by Telegram until Feb 2020
Telegram Group and TON Issuer will not offer, sell, deliver, or distribute “Grams” to any person or entity, until the conclusion of the hearing scheduled for February 18 and 19, 2020.
Just a couple of days after the United States Securities and Exchange Commission (SEC) filed a proposed consent order regarding the offering of Telegram’s “Grams”, the Court has approved the proposal.
Today, Judge P. Kevin Castel of the New York Southern District Court, signed the proposed consent order. Now, therefore, upon the consent of the parties, it is ordered that the defendants shall not offer, sell, deliver, or distribute “Grams” to any person or entity, until the conclusion of the hearing scheduled by the Court for February 18 and 19, 2020, except upon further order of the Court or agreement of the parties. At the Hearing, any party may move the Court for the continuation or dissolution of this Order.
According to the SEC’s complaint, Telegram Group and TON Issuer Inc. commenced raising capital in January 2018 to finance the companies’ business, including the development of their own blockchain, the “Telegram Open Network” or “TON Blockchain,” as well as the mobile messaging application Telegram Messenger. The companies 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 US purchasers.
Telegram allegedly promised to deliver the Grams to the initial purchasers upon the launch of its blockchain 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 SEC’s complaint alleges that the companies failed to register their offers and sales of Grams, which are securities, thus violating of the registration provisions of the Securities Act of 1933.