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Telegram ICO halted by SEC

Late friday, the United States Securities and Exchange Commission (SEC) announced that it is suing two offshore entities, Telegram and its wholly owned subsidiary, TON Issuer, for holding an unregistered token sale.
According to the complaint filed in the federal district court in Manhattan on the same day, Telegram sold approximately 2.9 billion crypto tokens, called Grams (GRM) to 171 buyers for a total of $1.7 billion. Around a quarter of that sum, $424.5 million, allegedly belonged to 31 purchasers based in the U.S. 
As a result, the SEC has obtained a temporary restraining order against Telegram and TON, seeking “certain emergency relief,” as well as permanent injunctions, disgorgement with prejudgment interest and civil penalties. Now, the official Telegram channel for TON investors is suggesting that the launch, scheduled for Oct. 31, could be postponed. So, what is happening with the largest private initial coin offering (ICO) in history?
Brief introduction to TON
GRM is a native currency of Telegram Open Network (TON), a blockchain platform aimed at facilitating payments and hosting decentralized applications (DApps) beyond Visa’s scalability levels. The project is developed by Telegram, an open-source encrypted messenger lead by two Russian entrepreneurial brothers, Pavel and Nikolai Durov, who fled their native country. TON will ostensibly be integrated into the app, which boasts over 200 million users worldwide and is widely popular within the blockchain and cryptocurrency community. 
According to third-party research, TON has the potential to serve as a gateway for crypto assets and related apps to “bank the unbanked” as well as become the first discovery platform for Web 3.0 applications — “akin to the App Store for Web 2.0.”
TON saw one of the most successful ICOs in the industry. In 2018, Telegram raised almost $1.7 billion in two private token sale rounds, held in February and March. According to the documents Pavel Durov filed with the SEC, only those investing a minimum of $1 million were allowed to partake in the TON sale. The offering was limited to accredited investors in order to minimize the scrutiny from U.S. regulators.
In early October, Telegram published the entire TON source code on Github and announced that the launch of its long-awaited blockchain project would be scheduled for the end of the month. Additionally, the company revealed that all investors had been provided with TON key generation software and were to receive their GRM tokens by Oct. 16. 
Additionally, on Oct. 8, Telegram released the terms of use for its native cryptocurrency wallet, Grams Wallet, which is designed to be paired with TON. The company simultaneously stressed that it has no control over the blockchain. Those terms also distanced the company from regulations, stating “we are not responsible for determining whether taxes apply to any transactions you make using the Services or for collecting, reporting, withholding or remitting any taxes arising from any virtual currency transactions