Telegram must halt sale of its crypto token due to an SEC emergency restraining order

Illustration by Alex Castro / The Verge

The US Securities and Exchange Commission has formally instructed Telegram Group, the parent company of the Telegram encrypted messaging service, to halt sales of its cryptocurrency Gram. The SEC says the company, and its crypto-focused subsidiary TON Issuer Inc., failed to register an early sale of $1.7 billion of its crypto tokens prior to the October 31st launch of its blockchain network. Because the SEC treats cryptocurrency as securities, the agency says Telegram is in violation of the Securities Act.

“Our emergency action today is intended to prevent Telegram from flooding the US markets with digital tokens that we allege were unlawfully sold,” writes Stephanie Avakian, the co-director of the SEC’s Division of Enforcement, in a…

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