US SEC Deems $1.7 Billion Telegram Offering Illegal, Orders Halt

Messaging app Telegram has 300 million monthly users worldwide and raised more than $1.7 billion in funds in the US and overseas through a cryptocurrency issue

Telegram's cryptocurrency kickoff halted by SEC

But even if it doesn't prevent Telegram from launching outside the United States, it could still cause huge issues for the company.

Telegram, of course, is the massive messaging application that has become a home for the crypto community.

An initial coin offering by encrypted messaging service Telegram has been halted by a restraining order filed by the US Securities and Exchange Commission.

The company, whose encrypted messaging program Messenger has some 300 million monthly users worldwide, raised more than $1.7 billion in funds from USA and overseas investors.

Per an October 11 press release, the SEC has filed an emergency action and restraining order against Telegram and the Telegram Open Network (TON) in a complaint with Manhattan court. Former SEC attorney Zachary Fallon told Bloomberg that it could also complicate the company's ability to sell tokens in other countries. Around 2.9 billion digital tokens called grams have been sold to 171 purchasers, the SEC alleges. Stephanie Avakian added that the company, in the eyes of the SEC, has "failed to provide investors with information regarding Grams and Telegram's business operations, financial condition, risk factors, and management that the securities laws require".

The SEC in the past year has ramped up its efforts to combat companies raising funds through questionable digital currencies, which it said are ripe for potential fraud.

Latest News