Cryptocurrency bad day continues as SEC blocks Telegram's $ 1.7 billion planned toxic sale – TechCrunch

Cryptocurrency's bad news day continues to get worse as the US Securities and Exchange Commission has said it has filed an emergency action and received a restraining order for the planned $ 7.7 billion token offer to Telegrams block chain.

The move from the SEC follows the continued dissolution of the corporate alliance that supported Facebook's planned Libra cryptocurrency.

Telegram's ambitious founder Pavel Durov hoped to launch the Telegram Open Network as a payment alternative that would exist apart from the global regulatory system in much the same way that Libra would have done, according to the first TechCrunch report.

While the Telegram offer had been in operation since January 201[ads1]8, it had experienced problems in the middle of last year and the future of the protocol was already in jeopardy.

According to the SEC complaint, Telegram Group and its TON Issuer subsidiary began raising capital in January 2018 to fund the company's operations, including the development of the TON blockchain and Messenger .

The defendants sold 2.9 billion characters at discounted prices to 171 initial investors, including more than 1 billion of the company's symbols to 39 American buyers.

Telegram said it would deliver the codes to buyers by October 31, 209, and buyers could sell them out on the market. According to the SEC complaint, Telgram failed to register its offers and sales of tokens, which the SEC considers to be securities.

"Our emergency action today is intended to prevent the Telegram from flooding the US markets with digital tokens that we claim were illegally sold," said Stephanie Avakian, co-director of the SEC's Enforcement Division, in a statement. "We allege that the defendants have failed to provide investors with information about Grams and Telegram's business operations, financial conditions, risk factors and management required by securities laws."