According to a court filing by the US Southern District Court of New York Judge Kevin Castel ordered encrypted messaging giant Telegram to pay a civil penalty of $18.5 million to the SEC within the next 30 days for violating the securities laws for conducting illegal Initial Coin Offering. Earlier, the encrypted messaging giant Telegram had decided to not go ahead with its blockchain project TON after a legal battle with the SEC for over six months.
Telegram to return $1.22 billion back to investors.
The US court also ordered the disgorgement of the $1.7 billion that was raised in the ICO in 2018, asking Telegram to return 72% of the ICO amount as agreed in the ICO contract in the case the project is not launched. Telegram had already announced that the US investors would receive 72% of their investment back, and the non-US investors have the option to defer their payment for one year and receive 110% of their funds back. The US SEC had filed the lawsuit against Telegram just weeks before the company was scheduled to launch its cryptocurrency Gram.
Pavel Durov blamed the US court for killing the project.
The founder of the encrypted messaging giant Telegram had blamed the US court for the suspension of its blockchain network. Pavel blasting at the US court said that the people outside the US can vote for their presidents and elect their parliaments, but they still depend on the United States when it comes to technology and finance. The US court reasoned that if TON is allowed to distribute tokens outside the US even then the US citizen would be able to access Telegram’s cryptocurrency and that is why it ruled that the company can not issue its token even outside the USA. Even though Telegram would not be issuing its cryptocurrency Gram, but the TON blockchain is now live as an open-source network.