The company of Pavel Durov Telegram has signed a settlement agreement with the US Securities and Exchange Commission (SEC), follows from a document published in the judicial database. The company is obliged to pay the SEC a fine of $ 18.5 million. In addition, the company must return to investors $ 1.224 billion of the $ 1.7 billion that it raised in 2018 to develop the TON blockchain platform. This is the amount that Telegram did not have time to spend, according to a letter from SEC representative George Tenreiro to Judge Kevin Castel. Employees and representatives of the Telegram Group and TON Issuer, as well as everyone who receives a court decision, are required to notify the SEC of their intention to participate in any cryptocurrency projects within three years. The agreement was concluded on June 11.
According to one of the investors in the TON blockchain project, Mindrock Capital's managing partner Pavel Cherkashin, the agreement only fixed the status quo. "Durov returns 72% to investors, pays a relatively small fine and closes TON." Mindrock Capital, which invested $ 20 million in TON, according to him, has already received back 72% of the amount of investments.
The settlement agreement, which the court must approve, is a reasonable step by Pavel Durov, because the TON project has not been launched due to restrictions imposed by the court, and court costs must be minimized.
The lawsuit of Durov with the American authorities lasted from the end of 2019. In 2018, Durov raised $ 1.7 billion from 175 investors, including 39 U.S. citizens, to his new TON blockchain project. This project involved the emission of the Gram cryptocurrency.
However, the American regulator - SEC - was not satisfied that Durov did not formalize investments as transactions with securities. In October 2019, the SEC sued Telegram. Lawyers of the latter tried to prove that Gram is not a security, but the court did not agree with this. As a result, the TON project, the launch of which was postponed several times, was finally closed in May, and Durov published several emotional posts in which he criticized the American order.
To investors, Durov suggested either returning 72% of the initial investment immediately, or converting the investment into a loan and getting 110% back in a year. As investors told Forbes, many of them decided to immediately take their 72%. Not everyone had the opportunity to choose: 72% was simply returned to American investors.
The main victory of the SEC is to set a clear precedent for issuers of crypto assets and criteria for assessing whether they are securities. This precedent in the near future could play into the hands of the SEC in the ongoing case against the Canadian company Kik, which is also accused of conducting an unregistered properly ICO.
