elegram Group Inc. has settled with the Securities and Exchange Commission and will pay $18.5 million in civil penalties, as well as $1.22 billion back to investors, according to a news release.
Telegram, a startup known for its encrypted messaging platform, sold $1.7 billion in digital tokens to investors world-wide, including in the United States, without registration to the SEC. The SEC filed a complaint against Telegram in late 2019 alleging that the tokens it sold were securities and violated federal securities laws without registration. Telegram did not confirm or deny the allegations, but agreed to settle.
“New and innovative businesses are welcome to participate in our capital markets but they cannot do so in violation of the registration requirements of the federal securities laws,” said Kristina Littman, chief of the SEC Enforcement Division’s cyber unit in the release. “This settlement requires Telegram to return funds to investors, imposes a significant penalty, and requires Telegram to give notice of future digital offerings.” 