Telegram to pay cryptocurrency investors $1.2 billion and $18.5 million to the SEC
The dispute between Telegram and the Securities and Exchange Commission is coming to a close.
Telegram and the U.S. Securities and Exchange Commission’s dispute is finally ending with the filing of the case’s final judgment. In the document, Telegram is ordered to pay back $1.2 billion to cryptocurrency investors as well as a fine of $18.5 million to the SEC.
On Thursday, June 25, 2020, District Judge P. Kevin Castel filed the final judgment in the case of the SEC vs. Telegram Group Inc. and TON Issuer Inc. In the final judgment, which was filed with the District Court of Southern District of New York, Telegram was ordered to pay $18.5 million to the SEC within 30 days as civil penalty, Bitcoin.com.
The final judgment also ordered Telegram to return 70 percent of the $1.7 billion dollars it raised from investors two years ago. The amount represents the unspent portion of the funds raised from investors minus any money that has already been refunded.
“Defendants are jointly and severally liable for disgorgement of $1,224,000,000,” the court document stated.
Telegram welcomed the proposed final judgment and highlighted its commitment and willingness to repay funds to investors. “Today’s proposed settlement reconfirms our commitment to repay the remaining funds to purchasers under the purchase agreements,” Pavel Durov, Telegram founder Pavel Durov, said. “We’ve already repaid more than $1.2 billion to the purchasers either directly or in the form of loans.”
The court order also requires both the defendants as well as those who receive the final judgment to notify the SEC 45 days in advance before they can participate “in an issuance of ‘cryptocurrencies,’ ‘digital coins,’ ‘digital tokens,’ or any similar digital asset issued or transferred using distributed ledger technology.” This requirement will be in effect for the next three years.
The SEC ordered Telegram to cease the sale of its Gram cryptocurrency after the company’s failure to register the same of $1.7 billion in tokens in what Telegram called pre-ICO offerings in 2018, according to The Verge. The company later canceled the planned Gram ICO reportedly due to increased SEC scrutiny.
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