Nasdaq has issued a formal reprimand to TON Strategy Company. The move stems from a violation of shareholder approval requirements. This is in connection with its $272 million Toncoin acquisition and related private placement financing. However, the company will remain listed on the exchange. Regulators determined that the violations were unintentional. They were not deliberate attempts to bypass compliance rules.
TON Strategy received the Letter of Reprimand on October 28. This followed an investigation into its August 2025 transaction structure. The firm avoided delisting. Nasdaq staff concluded that it had inadvertently breached listing rules. The lapse occurred during a $558 million private investment. This investment funded its shift into blockchain treasury management.
The reprimand addresses two separate compliance failures. These fall under Nasdaq Listing Rules 5635(a) and 5635(b). The first violation stemmed from the company’s August 7 private placement. This raised capital through the sale of approximately 58.7 million shares. It also included pre-funded warrants at $9.51 per unit. Nasdaq determined that this transaction resulted in a change of control. This was after the Executive Chairman, through Kingsway Capital Limited Partners, acquired approximately 19.99% ownership.
What are the implications of Nasdaq’s reprimand for TON Strategy’s digital asset treasury approach?
The second violation involved the $272.7 million Toncoin purchase agreement. It was executed by a company subsidiary on July 31. Because 48.78% of the private placement proceeds funded the digital asset acquisition, Nasdaq ruled that prior shareholder approval was mandatory. This is based on Rule 5635(a). The company had relied on outside advisors who believed the transaction complied with existing regulations.
Nasdaq noted that the closing of the Toncoin purchase was contingent upon completion of the private placement. The substantial proportion of financing directed toward digital assets. This triggered the requirement that the company obtain shareholder consent. This applies before issuing stock representing 20% or more of the outstanding shares. It also applies to voting power in connection with asset acquisitions. TON Strategy has accepted the sanction. It has committed to future compliance. This demonstrates an effort to maintain operational integrity in the blockchain market.
The company’s strategic shift, formerly known as Verb Technology, is notable. It rebranded as TON Strategy following the August transaction. This positioned it as the first U.S. publicly traded firm to adopt Toncoin as a core treasury asset. The strategy involves generating yield through TON network staking mechanisms. The company expects cash-flow-positive returns over time. This mirrors a broader institutional trend in the digital asset space.
