Nasdaq Reprimands TON Strategy Over Toncoin Deal Rule Breach

Nasdaq has formally reprimanded TON Strategy for violating listing rules tied to its $272.7 million Toncoin purchase and related PIPE financing. The company, formerly known as Verb Technology Company, failed to secure shareholder approval before issuing stock to fund the deal, according to a recent SEC filing.

TON Strategy’s Toncoin Deal Draws Scrutiny Over Stock Issuance Breach

TON Strategy, which accumulates Toncoin linked to the Telegram blockchain, received the reprimand after Nasdaq determined that the company breached requirements concerning stock issuance. Under Nasdaq rules, companies must seek shareholder approval when issuing shares that represent at least 20% of their total outstanding stock.

In an 8-K filing submitted Wednesday, Nasdaq stated that TON Strategy did not meet this requirement while executing a private investment in public equity (PIPE) deal to acquire Toncoin. The exchange described the breach as a rule violation but noted that the actions were not deliberate.

Nasdaq Finds No Intentional Misconduct but Flags Governance Failures

On August 4, Verb Technology announced a $558 million PIPE financing to form a publicly listed TON Treasury Strategy Company in partnership with Kingsway Capital. The financing closed three days later, following the issuance of common stock and pre-funded warrants under an August 3 subscription agreement. 

Approximately 48.78% of the PIPE proceeds were allocated to the Toncoin acquisition—a threshold that triggered the requirement for shareholder consent.

Key details from the filing include:

• TON Strategy allocated nearly half of its PIPE funds to Toncoin purchases.
• Nasdaq determined that the scale of issuance exceeded compliance thresholds.
• The company completed major restructuring during the transaction’s closing period.
• Former TON Foundation president Manuel Stotz was appointed executive chairman.
• Nasdaq found the violations to be unintentional, ruling out delisting as a penalty.

In its letter, Nasdaq confirmed that no further action would be taken, concluding that the compliance lapses did not stem from intent to bypass regulatory obligations.

The reprimand arrives weeks after CEO Veronika Kapustina cautioned that digital asset treasury firms, several of which launched earlier this year, were beginning to show signs of overheating in the market early last month.