US SEC sues Telegram over illegal Initial Coin Offering

US regulators on Friday obtained a legal order to halt Telegram's crypto project. The encrypted messaging platform raised $1.7 billion in its Initial Coin Offering. Telegram was supposed to launch its cryptocurrency Gram later this month. US SEC has alleged that the messaging company broke laws to raise funds for its cryptocurrency.

According to the press release on SEC’s website, the exchange filed an emergency action and obtained a temporary restraining order against Telegram for conducting an illegal ICO. US Securities and Exchange Commission in its complaint alleged that Telegram and Telegram Open Network did not register their sale of digital token Gram, which the SEC considers securities.

Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, said that their emergency action is intended to prevent Telegram from flooding the US market with digital coins that they allege were sold unlawfully. The complaint further alleged that the comapny failed to provide investors with information regarding their business operations and risk factors.

According to a New York Times report, The messaging platform is supposed to launch its cryptocurrency by the end of this month. Earlier, Middle Eastern Media Research Institute (MEMRI) released a report suggesting that the launch of Telegram’s cryptocurrency would make it challenging for authorities to fight money laundering and terrorism funding.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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