SEC blocks Telegram with its $1.7 Billion token sale

[khirech]

And FIAT? I do not have much on wallets.

[JollyGood]

I totally disagree with this decision SEC always took action very late against big ICOs why not they awake on the right time and now again people will lost their money without getting any refund. This is really unprofessional behavior what happening in this case because SEC has fishy track record.

Before Telegram started their private sale, SEC had long hinted that they will go after crypto crowdfundings. That is why you see many ICOs before barring US citizens from participating in their token sale. Telegram knew that and the risk involve but they still took it. I'm not saying what the SEC is doing is good either, they probably targeted telegram because of that huge money coming from US investors.

Yes the SEC could have easily made a decision a very long time ago but for them to do it at the 11th hour to a project that raised $1.7 billion is beyond a monumental PR failure for both Telegram and the SEC.
~

It probably took them time to figure that out but who knows? It could also be their strategy to kill telegram for whatever reason.

They probably have no intention of killing Telegram but they do have some sort of agenda. It might be to show others out there the power lay with the SEC.

Something does not stack up. Why did the SEC pull the rug from under Telegram and its TON/GRAM at such a late stage? With 44% of the tokens being offered and all being taken up by investors it will make so many problems for them and their investors.

[Bttzed03]

Yes the SEC could have easily made a decision a very long time ago but for them to do it at the 11th hour to a project that raised $1.7 billion is beyond a monumental PR failure for both Telegram and the SEC.
~

It probably took them time to figure that out but who knows? It could also be their strategy to kill telegram for whatever reason.

They probably have no intention of killing Telegram but they do have some sort of agenda. It might be to show others out there the power lay with the SEC.

Something does not stack up. Why did the SEC pull the rug from under Telegram and its TON/GRAM at such a late stage? With 44% of the tokens being offered and all being taken up by investors it will make so many problems for them and their investors.

It does look fishy and the idea flexing their power to send a strong message (again) to all kinds of token sale in US territory makes a lot of sense. We can only guess but one thing I think is for sure, they (SEC) will get their money from telegram.

[inthelongrun]

Because Telegram is a very secured communication app. The CIA cannot spy on it, reason why SEC cannot approve it.

Can Telegram just cease its US offices and relocate somewhere friendly to them? Many people in the US would still use it anyways with VPNs. 

[Pearls Before Swine]

The first paragraph of the SEC filing had me shaking my head in amazement at the part that I put in bold:

The Securities and Exchange Commission today announced that it has filed an emergency action and obtained temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds.

I had heard TON being discussed recently, but I had no real idea of what it was.  Thank you op for posting this link, because it's very informative.

By the way, this news should not shock anyone.  The U.S. had declared ico's as securities a while back, which is why people in the states don't (or can't) invest in them.  The ICO issuers don't register them with the SEC, so they can't be sold to potential investors in the states.  That is my understanding at least.  Anyway it'll be interesting to see what comes of this.

[pooh95]

I totally disagree with this decision SEC always took action very late against big ICOs why not they awake on the right time and now again people will lost their money without getting any refund. This is really unprofessional behavior what happening in this case because SEC has fishy track record.

I think that these delays are caused artificially, perhaps they see the new project as a payment platform that is suitable for the bank’s activities, it will be difficult to guess,  what the team should do, I think the project has the best minds of mankind, and with such resources they can solve this problem

[chanc3r]

I totally disagree with this decision SEC always took action very late against big ICOs why not they awake on the right time and now again people will lost their money without getting any refund. This is really unprofessional behavior what happening in this case because SEC has fishy track record.

Before Telegram started their private sale, SEC had long hinted that they will go after crypto crowdfundings. That is why you see many ICOs before barring US citizens from participating in their token sale. Telegram knew that and the risk involve but they still took it. I'm not saying what the SEC is doing is good either, they probably targeted telegram because of that huge money coming from US investors.

Yes the SEC could have easily made a decision a very long time ago but for them to do it at the 11th hour to a project that raised $1.7 billion is beyond a monumental PR failure for both Telegram and the SEC.
~

It probably took them time to figure that out but who knows? It could also be their strategy to kill telegram for whatever reason.

They probably have no intention of killing Telegram but they do have some sort of agenda. It might be to show others out there the power lay with the SEC.

Something does not stack up. Why did the SEC pull the rug from under Telegram and its TON/GRAM at such a late stage? With 44% of the tokens being offered and all being taken up by investors it will make so many problems for them and their investors.

it's not about having an agenda but that makes sense for SEC provides more protection to the US customers caused by

including more than 1 billion of the company’s tokens to 39 U.S. buyers

https://techcrunch.com/2019/10/11/sec-blocks-the-1-7-billion-token-sale-for-telegrams-cryptocurrency/

It's a lot of money, that makes sense if SEC goes wild after seen that before.

[Bowtiesarecool]

What do you think Telegram should do next?

I think they are more likely to do what is in this article:

Report: Telegram’s ‘Force Majeure’ Clause Curbs Investor Compensation

In the end, investors are the biggest losers and they get the big losses

Oh my. Had no idea there was such a clause with the contract. Kudos to them for anticipating possible force majeure and outlining them clearly rather than leave it for a courtroom to decide. Looks like BTC halving is the only thing the SEC can't hammer on at this rate /s

[BlacksmithCorporation]

Both Facebook and Telegram are having trouble with regulators on their own cryptocurrency projects. The common point of both hectares is that they have a large number of users, is this the cause of the difficulties of both?

[cahbagus555]

https://www.sec.gov/news/press-release/2019-212


What detrimental effect would this have on other firms using their existing tools/software which are widely used and are then used to offer tokens to their massive user base?

Do you think this is just nit-picking by the SEC or do you think these are real concerns and not just technicalities which resulted in them halting the token sale?

What do you think Telegram should do next?

I think the telegram has a legal team that will look for loopholes in this SEC regulation. Aside from telegrams, Libra Coin also faces regulatory constraints, but I am optimistic that this will not stop the emergence of new projects from large companies.

[Katashi]

What do you think Telegram should do next?

I think they are more likely to do what is in this article:

Report: Telegram’s ‘Force Majeure’ Clause Curbs Investor Compensation

In the end, investors are the biggest losers and they get the big losses

You are absolutely right! whether they refund the money or not, the investors are still losing because of the time wasted for their investment. i can't help but to agree on other comments that SEC is hitting Telegram on purpose, particularly on the timing of SEC to halt Telegram token launch despite that they tried to engage with the regulators for the past 18 months regarding the TON blockchain.

[StephenJH]

SEC plays a big role in huge token sales and expecting a silent move by the regulators is not smart idea. Telegram developers should make an agreement, settlement with the SEC and this is one of the reasons why teams avoid to accept the investments from the citizens of the US. Using the user data for acceleraing the token sale looks like a serious accusation for the social media platforms, I just saw this on the Reddit.

[Bowtiesarecool]

To be perfectly honest, the SEC acted right this time based on the following claims from Coindesk reporting "The SEC cited a “pitch to one United States-based investor around January 2018.” To attract the investor, “Telegram spoke of its “A+ engineering team” and the “chance for 0x-50x returns on the investments.”". With the above, they've matched the requirements for Howey test:
1. An investment of money.
2. In a common enterprise.
3. With an expectation of profits predominantly from the efforts of others.
The made people invest with the offer of profits from the efforts of their A+ engineering team.
They should have known better

[JollyGood]

They are getting more and more crazy with this amounts of money!
They saw new way to take money from people easy and it is not called TAX

I don't support Telegram and Gram coin in any way, but this is just getting silly

I agree this is really getting silly. Things did not have to get to this stage.

What sort of example are the SEC setting and also why did Telegram go ahead with the $1.7 billion token share before they approached the SEC and made some sort of deal where they could satisfy all requirements put to them?

[~Money~]

They are getting more and more crazy with this amounts of money!
They saw new way to take money from people easy and it is not called TAX

I don't support Telegram and Gram coin in any way, but this is just getting silly

guys its the new economic model, its not silly at all, the main reason ppl like you think that way is we had seen too many scammers using this method and make their pockets larger and larger to be able to hold all the funds they gain!

I agree this is really getting silly. Things did not have to get to this stage.

What sort of example are the SEC setting and also why did Telegram go ahead with the $1.7 billion token share before they approached the SEC and made some sort of deal where they could satisfy all requirements put to them?

although telegram is truly decentralized service, but its a russian based product and its wont be hard to understand why they didnt thought of SEC, but recent reactions to the SEC news in last few days, shows they may be getting ready to legalize that for USA users

the good news is that, project got even more attention by SEC, and will be moving forward even faster very soon

[Wintersoldier]

Because Telegram is a very secured communication app. The CIA cannot spy on it, reason why SEC cannot approve it.

Can Telegram just cease its US offices and relocate somewhere friendly to them? Many people in the US would still use it anyways with VPNs. 

Technically what they need is a regulation, maybe not directly in a reason that they need to spy on it, they just need to provide some guidance and regulation in order for telegram to stay right on track and without violating much of the rules/protocols that the SEC has. But the amount of 1.7Billlion token sale is too big for telegram, maybe that is also the reason why they blocked telegram, a potential leading market communication platform.

[InwardContour]

Did SEC put a permanent stop to the token sale or halted it due to regulation issues? I think if telegram meets required regulatory terms, they will scale through with the token sale. There was so much hype around telegram coin and TON blockchain, I do wish them success based on some features I look up to. If the token sale is permanently stopped, I don't really think it has any major effect on the market. I'm more interested in the TON blockchain than the coin actually.

[JollyGood]

$1.7 B can't just be ignore so SEC has to step in.

I guess today there ain't much left for Telegram to do but wait for the SEC's decision. I don't know if can make arrangement to pay SEC, all it needs is just money to collect. Shove some cash to their mouths and Telegram can move on. They can refund all those who invested but distributes their token freely, I don't know if SEC can get money from them with this.

I do not think it is as easy as Telegram paying a fee then getting the go-ahead. With disastrous scams such as Onecoin raising $4.9 billion and its founder in hiding it seems highly unlikely the SEC will simply ignore ICOs when they are involving US citizens.

Maybe the SEC will force Telegram to return funds and start from the beginning after they submit an application and go through the appropriate process.

[magneto]

https://www.sec.gov/news/press-release/2019-212


What detrimental effect would this have on other firms using their existing tools/software which are widely used and are then used to offer tokens to their massive user base?

Do you think this is just nit-picking by the SEC or do you think these are real concerns and not just technicalities which resulted in them halting the token sale?

What do you think Telegram should do next?

I think that any company that has an existing product will most likely continue to be classified as a security if they offer their tokens up for ICOing.

That's just the plain hard truth right now. It doesn't matter whether or not if you think it is right, based on SEC's definitions of what a security is, these tokens are probably are. And besides, telegram doesn't have the best reputation within law enforcement, even though it's probably unfair.

Kik went through something similar. Future businesses should certainly beware.

[LbtalkL]

Why do you think SEC and US government halted big companies that started a big move with cryptocurrency? First, they halted libra and now Telegram, I don't know why US is afraid of cryptocurrency. For sure this will have some massive adoption given it has massive users. Looks like they are halting the next bullrun.