The juxtaposition of two recent SEC enforcement actions against
token issuers may shed some light on the regulator's evolving
regulatory framework.
On October 11, 2019, the SEC won a motion for a temporary restraining order from
the U.S. District Court for the Southern District of New York
against Telegram Group Inc., the creator of Messenger, an encrypted
messaging application, to halt its planned $1.7 billion
"Gram" token distribution and follow-on sale. The
SEC's action, which alleged that the planned offering of Grams
would violate the registration requirements of Sections 5(a) and
5(c) of the Securities Act of 1933, put a halt to a long-running
development project and more than 18 months of continued
interaction with the SEC.
