Telegram to pay $18.5 million fine, return $1.2 billion investor money to settle with SEC

Telegram has agreed to return more than $1.2 billion to investors that investors had put into its TON digital token and to pay an $18.5 million civil penalty to resolve charges over an unregistered digital token coin offering.

The civil penalty being paid is to resolve the US Securities and Exchange Commission’s charges that the instant messaging platform’s unregistered offering of digital tokens called “Grams” violated the federal securities laws.

SEC in October halted a $1.7 billion digital token offering by the firm, saying Telegram had raised capital to finance its business by selling 2.9 billion Grams to global investors.

Telegram neither admitted nor denied the SEC’s allegations.

In March, the U.S. District Court for the Southern District of New York agreed with the SEC and issued a preliminary injunction.

In May, Telegram announced that it was shutting down the TON initiative.

Kristina Littman, chief of the SEC Enforcement Division’s cyber unit, in a statement said, “New and innovative businesses are welcome to participate in our capital markets, but they cannot do so in violation of the registration requirements of the federal securities laws. This settlement requires Telegram to return funds to investors, imposes a significant penalty, and requires Telegram to give notice of future digital offerings”

As Telegram missed a deadline to launch its TON platform due to a court injunction, the firm had to return funds to purchasers