Nasdaq criticizes TON Strategy: $272 million Toncoin acquisition violates shareholder approval rules

Nasdaq has officially reprimanded TON Strategy Company, accusing it of violating shareholder approval requirements in its $272 million acquisition of Toncoin and related private sale financing. Although the company faces regulatory penalties, Nasdaq staff determined that the violations were not intentional, allowing TON Strategy to avoid delisting and continue trading. This incident highlights the necessity for publicly listed companies to strictly adhere to securities trading regulations when making large digital asset acquisitions.

Toncoin Acquisition Case: TON Strategy Violates Two Major Nasdaq Compliance Red Lines

The TON Strategy received a formal reprimand letter from NASDAQ on October 28, 2025, regarding its transaction structure aimed at transforming into a blockchain asset management company in August. Despite obtaining advice from external consultants, the company inadvertently violated two provisions of NASDAQ's listing rules.

• First violation: Change of control: The first violation involves the company's private sale on August 7, raising funds by issuing approximately 58.7 million shares and prepaying warrants. Nasdaq determined that the transaction constituted a change of control due to the executive chairman acquiring approximately 19.99% ownership through Kingsway Capital Limited Partners, accompanied by a significant leadership restructuring.
• Second Violation: Excessive Asset Acquisition Ratio: The second violation is related to the $272.7 million Toncoin purchase agreement executed by its subsidiary on July 31. Since 48.78% of the funds raised from the private sale were used for this digital asset acquisition, it represents several times the number of shares of the company before financing. Nasdaq ruled that, according to rule 5635(a), the company must obtain prior approval from shareholders.

Avoiding Delisting Risks: The Company's Commitment to Compliance and Regulatory Considerations

When making the decision to condemn rather than delist, Nasdaq weighed the nature of the violations by TON Strategy and the company's future compliance commitments.

• Unintentional Violation: Nasdaq believes that TON Strategy's violations were unintentional and did not demonstrate a pattern of noncompliance, which is a key factor in avoiding delisting procedures.
• Commitment to Cooperation: The company has accepted the ruling from regulatory authorities and has pledged to work closely with the exchange on future compliance matters, demonstrating a proactive corrective attitude.
• Market Impact: Following the condemnation disclosed through Form 8-K on October 29, the company is not required to take further action, and its stock (ticker symbol TONX) will continue to trade on Nasdaq, with no significant change in market volatility due to the event.

Strategic Transformation: TON Strategy Leads a New Trend in Institutional Digital Assets

The rebranding and strategic shift of TON Strategy (formerly Verb Technology) has made it the first publicly listed company in the United States to position Toncoin as its core asset, aligning with the broader trend of institutional digital asset allocation.

• Transformation draws attention: When the strategic transformation was announced in August, although the price of Toncoin itself slightly declined, investors' enthusiasm for the blockchain integration strategy drove its stock price to soar by 193.38%.
• Staking income model: The company's strategy is to retain 77% of the raised capital for liquid assets while aiming to acquire up to 5% of the circulating market value of Toncoin and generate returns through the TON network's staking mechanism, with the goal of achieving positive cash flow.
• Industry Trends: This model is similar to the institutional validator framework of SOL Strategies on Solana and echoes the strategy of companies like BitMine Immersion Technologies, which accumulate Ethereum with the aim of controlling 5% of the circulating supply.

Core Competitive Advantages of TON Strategy and Integration with Telegram

The TON Strategy positions its assets on the native token of The Open Network, benefiting from deep integration with instant messaging giant Telegram, thus forming a unique competitive advantage.

• Deep Integration of Ecosystem: Telegram has designated TON as its exclusive blockchain partner for advertising, mini-apps, and tokenized assets, ensuring that the infrastructure for TON Strategy investments has a vast user base and application prospects.
• Operating Suggestions: The compliance risk of the TON Strategy has been addressed through a condemnation letter, but its digital asset strategy is still worth long-term attention. Investors should pay attention to the actual yield generated by the company's staking and the application progress of Toncoin within the Telegram ecosystem.

Conclusion

Despite being reprimanded by Nasdaq, the TON Strategy avoided delisting, marking an important regulatory education for Wall Street in the trend of crypto asset allocation. This event serves as a reminder to all publicly listed companies seeking to transition into digital assets that they must adhere to the highest standards in handling compliance and disclosure requirements of traditional finance in the rapidly changing blockchain space.