US SEC: Telegram sells tokens due to cash shortage

According to CoinDesk, the US SEC stated that Telegram launched a token sale in 2018 because of its "cash shortage" and was unable to pay for server fees. The latest lawsuit filed on Thursday underscored the SEC's core point: Token sales are simply an alternative to equity financing. The document states that Telegram CEO Pavel Durov was looking for a way to raise funds at the time. He acknowledged the need to pay for equipment and considered selling shares before taking an unconventional approach. According to court documents, until recently, Telegram was self-funded by Durov. "In 2017, Durov needed" cash "to buy Messenger servers and pay the relevant fees. He considered selling traditional voting shares but eventually decided not to sell them, fearing that this would affect the company's integrity, values ​​and entrepreneurship, "The SEC said in a motion calling for a summary verdict," Telegram also does not want to start charging users or selling advertisements because it believes that doing so would undermine its ability to expand its user base and compete with competitors. " Telegram never contacted the SEC before the token issue began, but Telegram only applied for an exemption from the registration requirements under Regulation D after the staff learned of the situation and contacted the company. Durov has confirmed this, explaining that Telegram thought it was too early to contact the SEC.