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For The Second Time, Telegram Forced To Delay TON

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May 1, 2020 | 

Dan Mitchell |  0 Comments| 

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A recent district court judgement which ruled in favour of the SEC, has seen an injunction being placed against Telegram which prevents the social media company from issuing its ‘grams’ digital asset and launching its associated TON blockchain platform. 

Following this, Telegram has distributed a letter to its investors (according to leaks from organisations such as CoinDesk) which confirms that it will not be issuing its anticipated ‘grams’ cryptocurrency on the previously scheduled date of April 30th 2020.

Telegram’s letter officially refers to “a recent US district court decision” as the reason for this action, before reassuring investors that they have a couple of options for redeeming refunds on their investments (as stipulated in the original ‘purchase agreement’ released back in October 2019).

The first option sees Telegram offering investors the ability to recoup 72% of their original investment on an ‘as soon as possible’ basis. Conversely: the second option asks investors to wait 365 days for the new expected release date, 30th April 2021, in return for the opportunity to receive a 110% return on their original investments.

Notably, there is no overt option for those who may wish to hold on and recoup a more significant return on investment - almost entirely defeating the purpose of investing in such a high-risk project.

A TON of Regulatory Roadblocks

Telegram has faced many regulatory roadblocks from US authorities and regulators, particularly the United States’ Securities and Exchange Commission (SEC), pertaining to the TON blockchain project as well as its associated digital asset, ‘grams’.

Most recently, on March 24th 2020, a US district court finally delivered judgement on the ongoing SEC vs Telegram case which ruled in favour of the former. This is the aforementioned “recent US district court decision” and caused Telegram to delay release and offer refund options to its investors.

“Considering the economic realities under the Howey test, the Court finds that, in the context of that scheme, the resale of Grams into the secondary public market would be an integral part of the sale of securities without a required registration statement.”

The first time Telegram faced regulatory scrutiny over its TON blockchain and ‘grams’ project was back in October 2019. Shortly following the public reveal officially confirming that Telegram was behind the project, the organisation was hit with its first injunction and this is the moment its release was delayed to this year - and now it has been postponed again.

In January of this year, the SEC tried (unsuccessfully) to compel Telegram to share its raw and unadulterated bank records as a means of determining the distribution of investor funds following its initial fundraising round. According to the SEC, Telegram was guilty of having raised capital by way of an unregistered securities sale for a proprietary digital asset.

Similar SEC Scrutiny

Telegram isn’t the only social platform which has faced significant and repeated regulatory roadblocks on its journey towards launching a blockchain and/or digital assets project.

Libra, for example, is a Facebook-led project backed by a consortium of institutional entities which has received similar ire from US regulators. One of the most significant instances of this came last year when Facebook was called to an audience with the U.S. senate as well as general criticism regarding not only data security issues surrounding its social media platform - but also the potential implications of the Libra project (basket of fiat-pegged stablecoins).

Another social media icon which has faced challenges when attempting to foray into blockchain and digital assets is Kik - which sacrificed its namesake messenger platform in order to redirect resources towards its ‘Kin’ blockchain project in light of a $100 million ongoing case against the SEC.

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