+ 0.64
+ 0.46%
+ 0.60
+ 0.36%

US Investors Forced Out Of Telegram Cryptocurrency Project Due To Regulatory Hurdles

May 5, 2020 9:25 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
US Investors Forced Out Of Telegram Cryptocurrency Project Due To Regulatory Hurdles

Telegram is looking to buy out the United States-based investors in its blockchain network immediately, CoinDesk reported Monday.

US Investors Cannot Extend Investments 

The launch of the "Telegram Open Network" was delayed to another year after the London-based company missed the April 30 deadline.

Telegram had promised, as part of the investor agreement, that it would offer a 72% refund on every investment if TON wasn't launched in time.

The company is still offering the refund, but informed buyers in a letter last week it will pay 110% of the original amount on any investment that is extended to April 2021.

In a second letter to investors on Monday, Telegram said that only investors based outside of the United States are eligible for the extension of investment, according to CoinDesk. Those based in the U.S. will only have the option to accept the refund.

"This offer is only being made available to offerees outside the United States who are not U.S. persons within the meaning of Regulation S under the U.S. Securities Act of 1933," the letter said, as reported by CoinDesk.

SEC Lawsuit Delays TON Launch

Telegram's decision to omit U.S.-based investors from the latest move isn't surprising given the regulatory hurdles it has run into the country.

The Securities and Exchange Commission filed a lawsuit against the company in Southern District of New York in October last year and obtained an emergency restraining order, which delayed the launch of TON from the original planned date later that month.

Last month, the court also denied Telegram the right to distribute the TON native cryptocurrency, called Gram, to its non-U.S. investors, until a decision in the case is made.

Others that have tried launching their cryptocurrencies in the U.S., including Facebook Inc.'s (NASDAQ:FB) Libra Project, have faced skepticism from regulators.

Related Articles

PayPal To Partner With Broker For Cryptocurrency Offerings On Its Platform: Report

Paypal Holdings Inc (NASDAQ: PYPL) is reportedly partnering with New York-based cryptocurrency broker Paxos to let users on its platform purchase or sell virtual assets, according to CoinDesk. read more

Coinbase Custody Adds Matic To Its Institutional Cryptocurrency Vault

Coinbase, the largest US cryptocurrency exchange, has added a new digital asset to its custodial service. Matic, the native token of Matic Network, can now be deposited and withdrawn by the institutional firms that utilize Coinbase Custody. read more

Exclusive: Gary Vee And Matt Higgins Talk Coinbase IPO, Going Public At Height Of A Trend

As the markets wait with anticipation for this coming week's IPO of Coinbase, Matt Higgins and Gary Vaynerchuk joined Benzinga’s “SPACs Attack” last week to share their thoughts. read more

Why Crypto Exchange Binance Launches Tesla Stock Tokens

Binance, the largest crypto exchange by volume, announced today that it is launching zero-commission tradeable Tesla Inc (NASDAQ: TSLA) stock tokens. read more