Telegram to Return $1.2 Billion to Investors and Pay $18.5 Million Penalty to Se

[hugeblack]

Telegram to Return $1.2 Billion to Investors and Pay $18.5 Million Penalty to Settle SEC Charges

It seems that Telegram digital tokens called "Grams," which Telegram intends to sell to fund applications, have been knocked out, as the Securities and Exchange Commission announced today that it has obtained court approval for settlements with Telegram Group Inc. Its wholly-owned subsidiary, TON Issuer Inc., thus the defendants agreed to return more than $ 1.2 billion to investors and pay a civil fine of $ 18.5 million.
This settlement also requires Telegram to notify future digital offerings.

On Oct. 11, 2019, the SEC filed a complaint against Telegram, alleging that the company had raised capital to finance its business by selling approximately 2.9 billion Grams to 171 initial purchasers worldwide. The SEC sought to preliminarily enjoin Telegram from delivering the Grams it sold, which the SEC alleged were securities that had been offered and sold in violation of the registration requirements of the federal securities laws. On March 24, 2020, the U.S. District Court for the Southern District of New York issued a preliminary injunction barring the delivery of Grams and finding that the SEC had shown a substantial likelihood of proving that Telegram's sales were part of a larger scheme to unlawfully distribute the Grams to the secondary public market.

Read more and source ---> https://www.sec.gov/news/press-release/2020-146

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[Josefjix]

Are shit tokens holders eligible for this heavy bounty offer by the court ruling?.

[crwth]

I have read the news regards to Telegram not being allowed by the SEC in 2019. With everything that has happened during the past few months, it's understandable that the update is just recent. Sadly, there are a lot of people who had hopes up for this, but I guess it's not the right time, and it wasn't registered of some sort. It's a way to protect the investors as well.

There could still be a chance for them in the near future to offer as long as they notify. I think there's something that could happen there, but who knows?

[DoubleEdgeEX]

That´s actually admitting a mistake, or admitting having commited a crime. I assume that was the easiest and fastest way to end this tragedy of a law suit, but I think it leaves a sour taste to it, not against Telegram but to regulatory folks

[Coin_trader]

This is the repercussions of there unregulated ICO even though they knew that they will get approval. They still continue like no one can stop them. I hope that small investors too will get a refund because this kind of refund will priority whale investors first then down to the shrimps. This is a pain in the ass for claiming the money because you will not provide all details that you used during ICO. I experience this scenario in Paragon Project.

TON deserves this penalty. They think they can ignore SEC because they are a well known giant company.

[leyton11]

 That's a big loss for Telegram but I think they can still maintain it very well. because now people use telegram a lot and maybe in the future people will come to Telegram to discuss all issues. In Messenger, IG and many other social networking sites, there is no privacy, our personal information is always stolen. That's why Telegram has a problem but I still believe it will thrive in the future.

[Josefjix]

That's a big loss for Telegram but I think they can still maintain it very well. because now people use telegram a lot and maybe in the future people will come to Telegram to discuss all issues. In Messenger, IG and many other social networking sites, there is no privacy, our personal information is always stolen. That's why Telegram has a problem but I still believe it will thrive in the future.

How do telegram generate its revenue?

[cryptoaddictchie]

That´s actually admitting a mistake, or admitting having commited a crime. I assume that was the easiest and fastest way to end this tragedy of a law suit, but I think it leaves a sour taste to it, not against Telegram but to regulatory folks

Since they paid their penalty. I am sure they will think twice before running any sort of crowdfunding for TON. Also having paid the $18million USD just like that, I am wondering why they need to launch an ICO hence they can fund their own blockchain project? They can give any interested users their token who will contribute to their development rather selling off from investors like what BTC and railblock project(now Nano) did?

_{Maybe thats how business roll and selling of tokens are necessary for every big firms wanted to launch a blockchaij project}

[davis196]

That's a big loss for Telegram but I think they can still maintain it very well. because now people use telegram a lot and maybe in the future people will come to Telegram to discuss all issues. In Messenger, IG and many other social networking sites, there is no privacy, our personal information is always stolen. That's why Telegram has a problem but I still believe it will thrive in the future.

How do telegram generate its revenue?

Accroding to freedough.com:

Telegram is a free app and runs on donations. According to a blog on the telegram: We believe in fast and secure messaging that is also 100% free. Pavel Durov, who shares our vision, supplied Telegram with a generous donation, so we have quite enough money for the time being.Oct 23, 2018

I guess that the Telegram owners and devs relied on the ICO to fund the company and build a business model around accepting "Gram" payments for future "premium" services that will be offered by Telegram.
Now the funds will have to get refunded to the investors and I don't know how Telegram will survive in the long term.
Maybe they will start an Ad platform and sells targeted Advertising,just like Facebook or Instagram.This will ruin their current Business model(which is focused on privacy)for sure.Another option is to sell some premium stuff,just like Discord is selling nitro.

[hugeblack]

How do telegram generate its revenue?

The answer to this question will determine the fate of the application, so far they say that they depend on self-financing from Nikolai Durov^[1] & Pavel Durov^[2] and then they will rely on donations, but I do not think that donations^[3] will allow them to provide the same services.
The report forces them to return the money, but I think they will think of some solutions and try to put that currency back. It may be offered for trading and selling.
The worst option is to sell ads, but it will be the end of this application. Let's see how Pavel Durov will solve the problem.

[1] https://en.wikipedia.org/wiki/Nikolai_Durov
[2] https://en.wikipedia.org/wiki/Pavel_Durov
[3] https://telegram.org/faq#q-how-are-you-going-to-make-money-out-of-this

[Josefjix]

How do telegram generate its revenue?

The answer to this question will determine the fate of the application, so far they say that they depend on self-financing from Nikolai Durov^[1] & Pavel Durov^[2] and then they will rely on donations, but I do not think that donations^[3] will allow them to provide the same services.
The report forces them to return the money, but I think they will think of some solutions and try to put that currency back. It may be offered for trading and selling.
The worst option is to sell ads, but it will be the end of this application. Let's see how Pavel Durov will solve the problem.

[1] https://en.wikipedia.org/wiki/Nikolai_Durov
[2] https://en.wikipedia.org/wiki/Pavel_Durov
[3] https://telegram.org/faq#q-how-are-you-going-to-make-money-out-of-this

If they are to sell ads as seen on other similar communities. That would be the end of telegram. Telegram is good as it is. I believe there are competitors looming behind for every possible way to eliminate Telegram from its dominance. I just hope this penalty doesn't affect their market and services.

Pulling out $1.2 billion out of their $3.8 billion net worth would affect them but they will definitely try and recuperate.

[eaLiTy]

Pulling out $1.2 billion out of their $3.8 billion net worth would affect them but they will definitely try and recuperate.

I am sure the funds collected in the name of their token distribution will not be shown as the companies net worth, i assume the funds are collected and deposited in their bank account and that will enable them to collect dividends from the bank and $1.2 billions will get them some change.

The only positive aspect regarding this is that i hope all the ICO that collect funds in the future will be liable to return the funds to the investors if they are not able to fulfill the project and if there is a healthy situation like that then you might see a turnaround in the ICO market that has legit projects and we can weed out the scams.

[hatshepsut93]

That´s actually admitting a mistake, or admitting having commited a crime. I assume that was the easiest and fastest way to end this tragedy of a law suit, but I think it leaves a sour taste to it, not against Telegram but to regulatory folks

They did run an unregistered security sale, and that's illegal. If they tried to fight it, they'd very likely ended up with a much higher fine and some lawyer fees on top of it. You may consider it not immoral to run an ICO, but it is against the current laws.

And from my point of view, you don't need $1.2 billion to make a token, a million or two should be more than enough, and Telegram, being a big company, could have easily afforded that.

[jjigoku]

That´s actually admitting a mistake, or admitting having commited a crime. I assume that was the easiest and fastest way to end this tragedy of a law suit, but I think it leaves a sour taste to it, not against Telegram but to regulatory folks

I don't see this a mistake, but rather a bureaucracy against new technology and digital projects.
Telegram wasn't about the scam in the first place, however their plan was a bit sketchy in terms of US laws

[jacafbiz]

Telegram team's greed kill the case, it is not that most of these ICO projects ain't security but they decided to settle early with SEC and avoid all these media interest. EOS and co did the best thing with their case with SEC but Telegram feel they have the money to hire right lawyer and fight their case which to me was a great mistake. I have a feeling they will comeback with a new offering excluding all Americans because the team need the money to be able to survive

[bakasabo]

$1.2 Billion is nothing when trying to imagine how much Russia spent blocking (unsuccessfully) Telegram on Russian Federation territory during two years and later lifts its ban on June 19.
According to news, during that "ban" period telegram doubled its users database. Imagine how much income it brought or how much increased companies value. For them, this penalty is nothing, and I'm sure Durov could find way to solve issue with investors.

[Aveatrex]

Imagine how much income it brought or how much increased companies value. For them, this penalty is nothing, and I'm sure Durov could find way to solve issue with investors.

Doubling the user base brought nothing to Telegram, financially speaking.

Telegram just fucked up their chance of becoming independent from donators by conducting an illegal private sale. We don't know how long it will survive with donations, they have to find quickly a solution to bring back the "lost" investors money by conducting this time, a legit non-sketchy sale.

[ecnalubma]

Seems like broken dream for telegram and its believers with a penalty SEC is really a pain in every crowdfunding that violates regulations.

This is a big blow to every aspiring project and will serve a lesson too that before they can build their business first on the checklist must be SEC compliance. More projects might experience same fate if they keep ignoring government regulations.

[Negotiation]

Telegram is one of the social media for getting various information about crypto However, due to some bad projects in the middle they went down a lot But I think it will take a long time to recover. In addition to bringing in billions of dollars we have to advertise on social media sites and execute contracts with various organizations that will support these sites. Competitors will gradually increase through advertising but KYC will have to be given up because there is no need to do KYC on good and reliable sites later The main reason for KYC scam.

[DoubleEdgeEX]

That´s actually admitting a mistake, or admitting having commited a crime. I assume that was the easiest and fastest way to end this tragedy of a law suit, but I think it leaves a sour taste to it, not against Telegram but to regulatory folks

I don't see this a mistake, but rather a bureaucracy against new technology and digital projects.
Telegram wasn't about the scam in the first place, however their plan was a bit sketchy in terms of US laws

Absolutely, but how did it get perceived from the outside? If you do business in the USA today, you need 10 lawyers for each developer it seems. However, I really like Telegram and if they can find a way to be profitable and work now in the regulatory frameworks I would be happy to see them succeed!