Nasdaq Flags TON Strategy for Shareholder Approval Violation

Nasdaq has formally reprimanded TON Strategy, a company accumulating Toncoin (TON) linked to the Telegram Open Network, over rule violations tied to its $272.7 million token purchase and related private investment in public equity (PIPE) financing.

According to an 8-K filing submitted to the U.S. Securities and Exchange Commission (SEC) on Wednesday, Nasdaq determined that TON Strategy — formerly known as Verb Technology Company — failed to secure the required shareholder approval before issuing shares under its PIPE agreement to finance the Toncoin acquisition.

Related reporting: Saylor’s Strategy Could Join S&P 500 by Year-End Despite Bitcoin Slowdown: 10x Research

Under Nasdaq listing standards, companies must seek shareholder consent when issuing new common stock that equals or exceeds 20% of their total outstanding shares. Nasdaq found TON Strategy’s issuance crossed that threshold, triggering a compliance breach.

Nearly Half of PIPE Funds Went Toward Toncoin Acquisition

In early August, TON Strategy announced a $558 million PIPE financing in partnership with Kingsway Capital, aimed at establishing a publicly listed TON Treasury Strategy Company to hold and manage Toncoin reserves.

The financing officially closed on August 7, following the issuance of common shares and pre-funded warrants under a subscription agreement dated August 3. According to Nasdaq’s review, 48.78% of the PIPE proceeds — nearly half — were used to fund the Toncoin purchase, making shareholder approval mandatory under exchange rules.

The filing also revealed that TON Strategy underwent a major corporate restructuring around the same time. This included the appointment of Manuel Stotz, former TON Foundation president, as the company’s executive chairman — signaling closer alignment between TON Strategy and the Telegram-linked blockchain ecosystem.

Nasdaq Finds No Intentional Misconduct, Avoids Delisting

While Nasdaq determined that TON Strategy breached its shareholder approval obligations, the exchange stopped short of recommending severe penalties. The regulator noted that the violations appeared “unintentional” and “not a deliberate attempt to avoid compliance.”

“Those failures did not appear to have been the result of a deliberate intent to avoid compliance,” Nasdaq wrote. “As such, the staff believes that delisting the company’s securities is not an appropriate sanction.”

Nasdaq added that no further enforcement action would be taken against the company at this time. The reprimand serves as a formal warning, underscoring the need for stricter adherence to corporate governance and disclosure requirements in the fast-evolving digital asset sector.

Growing Scrutiny on Digital Asset Treasuries

The reprimand arrives amid a wave of regulatory scrutiny over crypto-linked treasury firms — public entities holding digital assets as part of their investment strategies. TON Strategy’s CEO, Veronika Kapustina, recently cautioned that several digital asset treasuries launched this year were already showing signs of a speculative bubble as of October 2025.

The Toncoin ecosystem has gained momentum in recent months, driven by growing adoption through Telegram’s integrated wallet features and the broader expansion of TON-based DeFi and gaming applications. However, the Nasdaq warning highlights the increasing friction between traditional market compliance standards and blockchain-native corporate structures.