Illegal ICOs Paid a Quarter of SEC’s $4.68 Billion Crackdown

Telegram remains the largest contributor to SEC penalties with $1.2 billion.

The United States Securities and Exchange Commission (SEC) has published its annual report for FY2020, revealing that its enforcement division collected over $4.68 billion in disgorgement and penalties. A quarter of that amount came from the bust of Telegram’s Gram token sale.

The money collected as disgorgement and penalties by the regulator hit a record last year. In the previous year, the SEC collected $4.3 billion, meaning there was a roughly an 8 percent increase in FY2020.

The SEC took action against a total of 715 cases that ranges from securities offerings, insider trading, and market manipulation. Out of the total collected proceeds, the regulator has already distributed $600 million among the victims.


Though the market watchdog penalized many financial companies for regulatory violations, the amount that came in from illegal ICOs become significant. The enforcement body collected $1.26 in total from eight illegal ICOs.

Telegram alone was forced to return $1.2 billion to Gram token investors and pay an additional $18.5 million in fines. The encrypted messaging platform alone paid 26 percent of the total amount collected by the commission.

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Telegram raised around $1.7 billion from selling Gram tokens to accredited and professional investors for launching its ambitious blockchain network. But, the project came under the radar of the SEC, resulting in a court battle that forced Telegram to shelve its plans.

Another high profile ICO took down by the SEC last September was kik’s. The Canadian company was fined $5 million for selling unregistered securities to the US-based investors.

The other six ICOs in the list include Bitclave, Shopin, NAC Foundation, Unikrn, Boon Tech, and Bitcoiin2Gen that together contributed around $40 million to the SEC seizures.

Additionally, the regulator detailed that its whistleblower program hit a record in FY2020, as 39 individuals received around $175 million.

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