Telegram’s Token Sale Accounts For Half Of US Penalties Since 2009

Telegram’s token sale accounts for half of the US regulatory penalties since 2009 according to a new report by Elliptic as we read further in our latest crypto news today.

US regulators dished out major fines against crypto startups according to the new Elliptic report but just one company is responsible for half of the penalties paid so far. The US regulators penalized crypto companies to $2.5 billion since 2009 and most of the total comes from lawsuits filed by the US Securities and Exchange Commission against ICOs. The crypto industry paid $2.5 billion in penalties since BTC was invented 12 years ago.

US regulators, mainly the US Securities and Exchange Commission fined crypto firms and individuals for everything including fraud, selling unregistered securities, and more as per Elliptic. The biggest case was against Telegram’s token sale to return more than $1.2 billion to investors and to pay an $18.5 million civil penalty. The SEC said that the Telegram token sale raised $1.7 billion was illegal because the company sold securities as investment contracts without registering the sale with the regulator.

Elliptic said that the fines are proof that the regulators are already regulating the industry. Dr. Tom Robinson who is Elliptic’s co-founder said:

“Contrary to the widely-held belief that the crypto asset industry is unregulated, U.S. regulators are increasingly imposing significant financial penalties on crypto businesses.”

Elliptic notes that the first big penalty from the regulators aimed a Ponzi scheme in 2014 when the SEC fined Trendon Shavers and BTC Savings Trust with $40 million. The SEC claimed that the Ponzi scheme promised investors huge returns but it took in 700,000 BTC for itself:

“Whether it’s U.S. dollars, Bitcoins, or magic beans, the SEC demonstrated that whatever the assets or technologies being used, ponzi schemes are a form of fraud that can be pursued using the same old laws.”

While it is true that the US agencies pursued some major projects under the current regulatory framework, half of the $2.5 billion generated by the enforcement actions came from one failed project: Telegram’s TON blockchain. The Consulting firm Cornerstone Research released a report that documented $1.7 billion of the SEC in crypto enforcement actions but Ellitpic’s tally of $2.5 billion took into account penalties from other regulators as well. The Commodity futures trading commission hit firms with huge penalties too and raked in $624 million from crypto projects in enforcement actions as the US Financial Crimes Enforcement Network served up to $180 million in fines. Most penalties relate to unregistered securities offerings and AML violations as per Elliptic and the aspiring investors and companies, therefore, call for more regulatory clarity in the industry.