Ring of Fire - SEC Hangs Up on Telegram

Polsinelli
Contact

Polsinelli

After an extended fight with the U.S. Securities and Exchange Commission ("SEC"), Telegram has agreed to resolve charges the company's unregistered offering of digital tokens called "Grams" violated the United States federal securities laws.  Telegram agreed to return more than $1.2 billion to investors and to pay a civil penalty of $18.5 million.

Telegram is the most prominent example of the failed Simple Agreement for Future Tokens ("SAFT") concept which has drawn the attention of the SEC.  Proponents of SAFTs mistakenly believed the tokens distributed as part of the SAFT were not securities.  The SEC and some courts believe the tokens issued as part of a SAFT are securities which must be sold pursuant to a registration with the SEC or an exemption from registration.

Telegram is unlikely to be the last settlement involving a SAFT that are deemed securities sold without a registration.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Polsinelli | Attorney Advertising

Written by:

Polsinelli
Contact
more
less

Polsinelli on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.