SEC Files Restraining Order Against Telegram Halting Its Token Sale

  • The US SEC filed an emergency restraining order halting the sale of Telegram's token GRAM. 
  • Regulatory body considers Telegram's token to be a security and says the company did not properly register for the 2018 ICO.

The United States Securities and Exchange Commission (SEC) has put a halt to Telegram’s cryptocurrency operation for American investors. 

Following on its widely reported denial of the latest bitcoin ETF proposals, the SEC filed an emergency action and temporary restraining order against messaging giant Telegram’s distribution of its token to US customers.

The SEC’s complaint centers around Telegram using its token GRAM to raise capital in January 2018 as a way to finance its business, which includes the messenger application and TON blockchain. Telegram sold 2.9 billion tokens in its ICO, raising more than $1.7 billion in funding. In addition, 39 US buyers were involved in the original ICO, accumulating more than 1 billion GRAM. 

According to the complaint made on Oct. 11, the US regulatory body considers Telegram’s token to be a security and says the company failed to properly register for the sale of GRAM. 

Stephanie Avakian, co-director of the SEC’s Division of Enforcement, explained in a statement, 

Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold. We allege that the defendants have failed to provide investors with information regarding Grams and Telegram’s business operations, financial condition, risk factors, and management that the securities laws require.

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Over 5,000 Ugandan Citizens File Petitions Over Cryptocurrency Scam

Michael LaVere
  • Over 5,000 Ugandan citizens petitioned Parliament to issue a refund over funds lost in Dunamiscoins Resource Ltd. closure.
  • Cryptocurrency firm shuttered operation in late December, reportedly taking UGX 23 billion in client funds. 

Over 5,000 Ugandan citizens have petitioned Parliament following a high-profile scam by cryptocurrency firm Dunamiscoins Resource Ltd. 

According to a report by KMA Updates, more than 5,000 Ugandans submitted a petition seeking a refund over money invested in Dunamiscoins, which suddenly shuttered in December 2019. The fraudulent crypto firm billed itself as a privately owned company and claimed it was committed to providing complimentary crypto services to banks in order to benefit the low income and poor. 

In late 2019, Dunamiscoins’s bank account was suddenly frozen, with petitioners arguing that more than UGX 23 billion ($6.2 million) in client funds was locked in the firm. 

Arthur Asiimwe, de facto leader of the petitioners, told the Speaker and members of Parliament, 

[The] government licensed this company and gave it the go-ahead to work as a non-deposit taking financial institution; it carried out its duties as a microfinance company. They gave unrealistic bonuses.

Asiimwe and other petitioners argued that Dunamiscoins was operating as a microfinance company despite being registered as a non-deposit financial institution. While two of the company’s three directors have been arrested, Managing Director Susan Awoni remains at large. 

Asiimwe continued, 

We are not satisfied with what the Police report that they have failed to arrest the third director. We request that the Financial Intelligence Authority follows this up and trace where the money is and we are refunded.

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