The SEC (Securities and Exchange Commission) fined Telegram $18.5 million for launching an ICO (Initial Coin Offering) that did not comply with regulations.
Telegram had raised most of the capital, about 1.7 billion dollars, through private sales, so it was not a real ICO open to the public, but regardless of this, the SEC forced Telegram to abandon the project, as well as everything that had been developed so far, i.e. GRAM and TON.
At this point with everything closed and blocked, considering that the tokens cannot be used in any way, Telegram had no choice but to return to investors what they had invested.
In addition to this loss, Telegram will have one month to pay the fine imposed by the SEC.
The fine was also confirmed in the official channels of Telegram and Pavel Durov, CEO of the messaging app, explained:
“Regrettably, we were unable to launch the TON platform by our deadline date due to the preliminary injunction ordered by the Court, and thus had to return the remaining funds to purchasers under our contractual agreements. Since we saw limited value in pursuing the court case further, we welcomed the opportunity to resolve it without admitting or denying our liability. Today’s proposed settlement reconfirms our commitment to repay the remaining funds to purchasers under the Purchase Agreements. We’ve already repaid more than 1.2bn to the purchasers either directly or in the form of loans”.
Unfortunately, it is once again the case that a project is forced to close due to regulations. Other situations were resolved only with a fine, as in the case of EOS which had to pay $24 million, or as in the case of Ripple which is still on trial to determine whether or not it is a security.
Taking into account all the negative elements related to these events, it’s understandable how the launch of an ICO is becoming increasingly risky and perhaps that’s also why their time is over and there are now new ways of raising capital.