Telegram to stop Gram cryptocurrency after U.S. blockade | Business

In 2018, the Telegram raised $ 1.7 billion by issuing a new cryptocurrency call Gram. The company has promised to deliver it to investors by October this year, but it may not be able to: the SEC, the U.S. Securities and Exchange Commission, has obtained an injunction that prevents the distribution of this digital token. The project is similar to Facebook’s Libra, which also faces problems.

Telegram

Telegram is accused of violating the Securities Act, US securities law, by failing to register the sale of the Gram cryptocurrency with the SEC. “We argue that the defendants did not provide investors with information about the commercial operations, financial conditions, risk factors and management of Grams and Telegram required by law,” says Stephanie Avakian, of the SEC, in a statement.

TON Issuer, a subsidiary of the Telegram Group, sold nearly 2.9 billion Gram units to 171 investors, and more than 1 billion of these tokens were acquired by 39 Americans, according to the SEC.

Telegram could lose $ 1.7 billion if it doesn’t issue Gram

The injunction that bars the distribution of Gram in the USA was granted by the federal court, and is temporary. However, the SEC wants to stop the cryptocurrency permanently. “We have said several times that there is no way to avoid federal securities laws just by labeling your product as a cryptocurrency or digital token,” writes Steven Peikin of the SEC in the statement.

The problem is that if Telegram does not distribute the Gram by October 31, the company will have to return the money raised – about $ 1.7 billion. This is a clause of the contract signed with investors.

Gram’s goal is to finance the development of a blockchain called TON (Telegram Open Network) that would allow payments to be made among the more than 200 million Telegram users.

The project is similar to Facebook’s Libra, which has also received bad news. Associação Libra lost support from PayPal, Visa, Mastercard and eBay. France wants to ban cryptocurrency in the European Union, and the U.S. is considering blocking the issuance of the cryptocurrency that the social network plans to launch in 2020.

With information: SEC, The Verge.

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