Final Judgment: Telegram to Pay Crypto Investors Back $1.2 Billion, US Court Orders
The dispute between Telegram and the U.S. Securities and Exchange Commission (SEC) is coming to a close as the final judgment has been filed. Telegram has been ordered to pay back $1.2 billion. The company must also pay the SEC a fine of $18.5 million.
Final Judgment in Case of SEC vs. Telegram
The final judgment in the case of the U.S. SEC vs. Telegram Group Inc. and TON Issuer Inc. was filed with the District Court of Southern District of New York on Thursday. District Judge P. Kevin Castel has ordered Telegram Group Inc. to pay a civil penalty of $18,500,000 to the SEC within 30 days.
Telegram must also return 70% of the $1.7 billion raised, specifically the unspent portion of the funds obtained from investors less any money already refunded or that investors have offered to loan the company. The court document states:
Defendants are jointly and severally liable for disgorgement of $1,224,000,000.
“Today’s proposed settlement reconfirms our commitment to repay the remaining funds to purchasers under the purchase agreements,” Telegram founder Pavel Durov was quoted by Siliconangle as saying. “We’ve already repaid more than $1.2 billion to the purchasers either directly or in the form of loans.”
Furthermore, the court order details that for the next three years, the defendants and all persons involved who received the final judgment are required to give 45 days’ notice to the SEC before participating “in an issuance of ‘cryptocurrencies,’ ‘digital coins,’ ‘digital tokens,’ or any similar digital asset issued or transferred using distributed ledger technology.”
The SEC vs. Telegram case began when the commission obtained a temporary restraining order on Telegram’s token sale in October last year for allegedly offering unregistered securities. The TON crypto project raised about $1.7 billion from investors in 2018. Telegram fought the SEC in court until a U.S. judge sided with the commission in March and ruled that the gram cryptocurrency could not be distributed both in the U.S. and globally. Telegram subsequently dropped the TON project and its appeal against the ruling. The company offered to pay investors back in two ways but U.S. investors only have the option of taking 72% refunds.
This proposed settlement is awaiting court approval. It is supported by both Telegram and the SEC. The court document can be found here.