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CityUptake and Community Take on Telegram Scammer as Ecosystem Shows its Mettle

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Scams, Ponzi schemes, and exits are a persistent crypto problem that often leaves victims angry but without recourse. Occasionally, a group effort on the part of the cooperating parties will strike back at the scammer and get back what was lost.

The origin of the scam

Telegram is a haven of activity for tokens on the TRON network and deals are often made between trusted parties. While tools have been built to conduct trustless trades, some still prefer to simply send and receive their own wallets. Unfortunately, this may result in scammers assuming usernames that resemble trusted users. One such incident occurred a few weeks back when a scammer impersonated a CityUptake official and had almost 40,000 CITY Alphatokens (~$1,100 USD). Subsequently, the assets were later recovered through a well laid-out plan by company officials and cooperation from a valuable community.

According to CityUptake, it took more than 24 hours and the efforts of four separate people to recover the stolen funds. The issue began when Michael, the CityUptake user, was approached by a scammer who impersonated Rob’s name, an actual CityUptake agent. Michael, being unaware of the deception and the change in the username, forwarded his requirements to the ‘agent.’ Michael was actually wanting to sell some of his CITY Alpha tokens in return for the corresponding amount of TRX tokens.

Retrieving the Funds

The CityUptake Alpha tokens are valuable in the CU community because of its relevance to the changing price climate. The Alpha tokens allow the holder to receive passive gains from a USD-based trade desk which provides a stable platform for dealing with crypto assets.  It was only after the transfer that Michael realized that he was taken for a ride by the scammer. 

Once Michael reported the scam to the CityUptake fold, the company jumped right on board to help recover the funds. Since the scammer’s wallet address was known, it was only logical to track it for any suspicious transfers pertaining to the stolen amount. The wallet was doubly verified when the wallet holder posted a sell order for 40,000 CITY Alpha(the exact amount that was stolen). Following this, the team proceeded with executing a plan to recover the funds. 

The first step was to contact IAmGroot, the administrator for the TRON Collectors trade channel. Once he was filled in with what had occurred, IAmGroot and Micaletol worked together to set up a simulated trade to reel in the scammer. During the trade it was spotted that the scammer’s wallet had moved 10,000 CITY Alpha tokens plus an additional 30,000 CITY Alpha tokens to the address TDQTg5Qx37djroUTBN1reZ5b2vF4Ywe7ae. IAmGroot and Michael scoured through the blockchain to find more pseudonyms used by the scammer and discovered that the wallet in question had conducted similar transactions earlier. 

Once the trade simulation was completed, IAmGroot and Micaleto were successfully able to retrieve the funds and call the scammer out on a public forum. Michael even stated:

“Today is a great day and also a big surprise !!! Last week I was scammed over 40k city and today MicaLETO, Groot4Rocket hangel72 and rudytwo bring it back in a fantastic cooperation and unbelievable collaboration. Big THANKS to this honorable and honest guys, who make that success against scam possible!!!!I’m proud and happy to be a member of CityUptake and TRONCollector under such super together working people!! who fight against this fki.. scammers with great success.”

Such a collective effort is something that sets the CityUptake community apart from the rest of its compatriots. This cohesion and spirit of working together are just one of several factors that make CityUptake and its ecosystem a tight–knit community.

Telegram and SEC Courtroom Tale Ends with $1.2 Billion Settlement

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Federal judge Kevin Castel signed the final ruling in the Telegram and SEC courtroom tale on June 26. The last court ruling by the New York Southern District Court ordered Telegram to reimburse investors up to $1.2 billion after the Telegram Open Network ICO collapsed.

The United States court approved the final judgment of a lengthy court battle between the Securities and Exchanges Commission and Telegram yesterday. The protracted court battle began when the SEC ordered Telegram to cease distributing its imminent GRAM tokens to the investors.

In a statement regarding the conclusion of the case, the SEC said:

“New and innovative businesses are welcome to participate in our capital markets; but they cannot violate the registration requirements of the federal securities laws.”

SEC demands fines in millions of dollars

In a judgment proposal by the securities regulator on June 25, the authority requested the federal Court to demand fines in millions of dollars from the several defendants connected with the lawsuit. 

Moreover, Telegram accepted to repay $1.2 billion to TON investors and penalties to the Securities and Exchange Commission. Of the total amount, $1.19 billion represents the amount paid by the defendants as ending total; the initial contract agreement to refund investors.

Telegram and SEC courtroom tale awaiting penal settlements

On the other hand, Telegram is inclined to pay $18.5 million in civil penalties. According to the SEC, the penal fees should be settled within thirty days after the approval of the judgment proposal. As per the consent reached on June 11, Telegram has agreed to pay the $18.5 million. The agreement, approved by the court, finally puts the Telegram and SEC courtroom tale to an end after a long period.

In conclusion, if Telegram fails to settle the amount in thirty days after court approval, the SEC may implement the Court’s ruling for disgorgement and civil penalty by going for civil contempt. 

Chinese TON Community to Roll Out Telegram’s Ditched Cryptocurrency Project

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The Chinese TON (Telegram Open Network) community group is among a number of community-led actions to roll out the rejected Telegram Open Network. In an announcement made on May 29, the Chinese TON group announced that it would launch its own network, less than a month after Telegram had been forced to ditch its blockchain project.

Telegram has been developing the ditched TON project since 2018. The CEO and co-founder of Telegram, Pavel Durov, envisaged the Telegram Open Network as a way of sending digital currency to its 400 million Telegram messenger users.

The ambitious blockchain was set to be launched back in October 2019, but the date was postponed due to the pending SEC lawsuit that criminalized Telegram’s $1.7 billion ICO. Eventually, the case turned out to be the end of the TON blockchain project after a few months in court. Telegram had no choice but to abandon the entire project together. And to refund their money back to the investors.

Chinese TON community trying to keep TON project alive

The Chinese TON community is among a number of communities aiming to continue with the TON blockchain project. In particular, there is Free Ton and New TON, two of whom want to set the Telegram Open Network going, using the open-source code availed by Telegram.

According to Mitja Goroshevsky, the co-founder of TON Labs and an ex-developer of the ditched TON project, he does not feel intimidated by the Chinese TON community. He said that the success of a community-led TON project “will and should be merit-based.” He added that there are only benefits to be gained.

Nevertheless, the Chinese led group might want to pass-on, as Free TON was rolled out back on May 7. Additionally, the TON Labs founder anticipates the entire network to launch in over a month, with cryptocurrency exchange platforms already revealing their interest in the native token, TON Crystals.

Telegram TON Blockchain Project Shut Down Following Court Order

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The widely anticipated blockchain project Telegram TON has been shut down following problems with its native GRAM token. Two years ago Telegram raised $1.7 billion in an initial coin offering ( ICO).

Telegram ‘s blockchain project was stopped after the Securities and Exchange Commission (SEC) sued the firm for claiming that GRAM was a safe. This aftermath of Telegram ‘s long court battle with the SEC is an example of U.S. government influence over global markets, and the need for decentralization.

End of road for Telegram TON blockchain project

The Telegram Open Network (TON) project by the messaging company was eventually closed. Telegram CEO Pavel Durov issued a statement stating that the project had indeed been halted. He has warned the public to ignore any other scheme that TON appears to be promoting.

In addition, the CEO thinks the U.S. government’s decision to disband Telegram TON blockchain initiative doesn’t add up. Yet the communications giants have no choice but to abide by the order. The prestige and role of the country as global leaders in financial matters and technology, gives it the power over such industries. Durov wrote this:

“Sadly, the U.S. judge is right about one thing: we, the people outside the U.S., can vote for our presidents and elect our parliaments, but we are still dependent on the United States when it comes to finance and technology.”

Telegram offers TON investors with solution

Recently, in the exchange for equity, the messaging firm presented TON investors with the ability to advance their funds to the company. Yet the U.S. investors soon overruled this tool. As a result, all GRAM investors were removed from this bid. Investors will be reimbursed with just 72 per cent of their initial investment, as per the earlier agreement.

When a company develops a blockchain network, the company is at risk of being called to court. The court or regulators will call for dissolution of the entity; because there is a consistent set-up for how the company is run. The new case of Telegram TON blockchain project being forced to shut down is a perfect example of that.

In contrast, blockchain networks such as the Bitcoin Network and Ethereum Network are run or controlled by any definite organization. If regulators or the court wanted to summon either network, they would not have anywhere to address them, since there is no central authority that controls them; the beauty of decentralization.

U.S. Court Judge Issues Temporary Injunction Against Telegram’s Digital Token Offering

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A U.S. federal court judge has directed the Telegram messaging platform to refrain from issuing its native gram tokens as scheduled in April, accepting a Securities and Exchange Commission (SEC) request for an injunction.

In a preliminary injunction held on March 24, Judge P. Kevin Castel, of the New York Southern District Court, stated that the SEC had demonstrated a substantial likelihood of victory in substantiating that the purpose of Telegram to roll out grams token is “an offer of securities under the Howey test. The Howey test refers to a factual test developed by the Supreme Court to evaluate if such precise transactions meet an investment contract’s requirements.

The Judge wrote:

“The Court finds that the SEC has shown a substantial likelihood of success in proving that the contracts and understandings at issue; including the sale of 2.9 billion Grams to 175 purchasers in exchange for $1.7 billion; are part of a larger scheme to distribute those Grams into a secondary public market; which would be supported by Telegram’s ongoing efforts.”

Telegram raised $1.7 billion for gram tokens in 2018

Two years ago, the messaging giants raised $1.7 billion through an ICO in an agreement to supply 2.9 billion gram tokens to 175 buyers. The buyers would make good profits after a resale of the digital asset to the public. According to Telegram, the project was legal citing a private placement of securities covered by a Regulation D 506(c) exclusion.

Moreover, Telegram sold the gram digital asset under a presumed simple consensus for future tokens or SAFT. SAFT refers to an investment contract built to offer an adaptable substitute to an ICO. 

The SEC had complained back in October 2019 that the selling of the Telegram Open Network (TON) was unlawful. The agency argued that the grams made up of securities should be registered with SEC under U.S. laws and the selling of securities. The messaging platform has since disagreed with the claims. However, Telegram has agreed to withhold the launching of Telegram Open Network (TON) until its dispute with the SEC is resolved.

Last year, on 11 October, the SEC successfully requested a temporary injunction to halt the inauguration of the TON blockchain. Generally speaking, Gram tokens can not exist without the TON blockchain network. Since that temporary injunction, the SEC has been struggling to stop the blockchain from being launched for good.

The Securities and Exchanges Commission made a huge leap towards obtaining a permanent injunction in the latest case. According to Judge Castel:

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

Despite the closure of courtrooms during the ongoing COVID-19 crisis, Castel’s ruling was imminent before the end of the month. According to a clause during the purchase of grams agreement; Telegram may reimburse its investors if the TON network fails to launch by April 30. 

Telegram and SEC Showdown Heats Up As Industry Waits With Bated Breath

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Cryptocurrency organizations have always had clashes with regulatory agencies and as time progresses the winds have been changing. In recent weeks, one major case involving the messaging platform Telegram and the Securities and Exchange Commission [SEC] has taken the case.

Touted to be one of the biggest cases in cryptocurrency history, several sectors of the fintech market, as well as the mainstream market, have sat up to take notice.

The issue pertains to the SEC taking Telegram head-on over its $1.7 billion token sales back in 2018. The Securities and Exchange Commission [SEC] stated that the Telegram had violated investor protection laws during the function. It claimed that Telegram token was actually security and not a currency, thereby subjecting it to a different set of laws.

The ongoing issue touches other things as well, such as the fact that it tests a rare two-part deal structure that the messaging platform used to hide from prying eyes. The SEC faces an uphill battle, however, because Telegram was not a weak opponent. Being used to scammers who swindle money using, Telegram acts as a different ball game after having Wall Street firms on their roster.

Companies like Kleiner Perkins Caufield & Byers and employees from SoftBank and Fortress investment were also a part of the group. Kenneth Herzinger, a partner at Orrick Herrington & Sutcliffe LLP had said:

“This is the biggest SEC cryptocurrency case yet. They have it all out on the line, and they’re pulling out all the stops. Until now, no court has dug into and addressed any of these complex issues before. If the SEC loses, it will certainly ripple through the industry.

Law enforcement agencies in the United States have also been wary of Telegram’s user base. Telegram’s encryption feature was also seen as a concern by the SEC. At one point, some ISIS proponents also used the messaging platform along with protestors in Hong Kong.

Telegram has deflected the claims made by the SEC thoroughly and explained why it skipped it. According to Telegram, it circumvented the SEC because investors did not actually receive the asset known as grams. By the time they receive Grams, the coin would be a commodity and out of its reach. The SEC countered by claiming investors were into the product only because of its profit-making capabilities. This sentiment made it look like an investment rather.

Companies such as GV, the venture capital arm of Alphabet had also considered investing in Telegram’s Grams. The lack of information surrounding this has been the major cause of this uncertainty.

 

Telegram Seeks 5-7 Weeks Time to Gather SEC’s Requested Details

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Telegram has undeniably one of the leading platforms for the crypto community. However, the Securities and Exchange Commission is currently investigating the platform’s token sale and in contrast, it has informed that it needs around 5-7 weeks of time to gather SEC requested details.

Telegram is yet to share SEC’s requested details

The report was first shared by Telegram’s law firm Skadden via Inner City Press on January 09, 2019. It was reported that the lawmakers requested full bank details of 770 individuals or entities in over 12 countries.

The law firm  Skadden has so far reviewed only 76 entities since September. Henceforth, it is requesting to exceed the time to at least 5-7 weeks more.

Essentially, SEC is urging Telegram to share bank details of parties involved in the company’s $1.7 billion worth token sale. On the other hand, Telegram denied acting. However, the court then proceeded the case and ordered Telegram to share “a proposed schedule for a review of the requested bank records to ensure that production of such records complies with foreign data privacy laws”.

This being said, Telegram had January 09 as the last date to submit the proposed schedule.

With the latest report into consideration, the law firm seeks around 5-7 weeks’ time to work upon the order. It’s worth noting that the legal watchdog claims Telegram sold unregistered securities and henceforth seeking to gain the company’s financial account to ensure the proper conduct of the token sale. Alongside this, it also wants to understand how the funds are being used that it raised two years ago.

While Telegram is dealing with legal affairs for quite long, the platform didn’t step back sharing the current state of the development of TON (Telegram Open Network blockchain).

In a most recent public notice on its website, the Telegram team informed that they will have no control over upcoming TON Blockchain – it further reasoned that the TON Blockchain will be decentralized and maintained by third parties.

Telegram tipping crypto service ParJar crosses new milestone with an increase in users

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The cryptocurrency market has made it a point to integrate into mainstream workings, and with the advent of several new tokens, that job has been made much easier. ParJar, a popular social cryptocurrency wallet with its native Parachute token shot to fame after it promised to make paying tips a simpler and more straightforward task. The official handle of the cryptocurrency recently tweeted:

“And the tips keep on rolling! ParJar just crossed half a million tips!!! 21,000 people in over 500 communities use ParJar to share crypto with friends. BOOM #cryptoforeveryone #bitcoin #eth #crypto”

Launched this year, Parachute has amassed quite a following who believe in the asset’s mainstream functionalities. The community now consists of 21,000 users who made a total of 512,000 tips.

The statistics also showed that 20,000 deposits were made with a total of 33,000 withdrawals. Users of the token were thrilled to see the progress of the digital toke, with many claiming it to be a fascinating event. The ParJar community relies on a couple of factors to ensure that its members stay loyal to the program.

ParJar has made it easy to reward the customers who use the token on a routine base, even ensuring that they get a name in public. The organization abides by the motto of creating and conserving project ambassadors to create a tight-knit crypto community. ParJar functions as a tool for community managers, enhancing games, competitions, community airdrops, and other basic functionalities.

The crypto works as an off-chain wallet for Telegram that enables you to send digital tokens to other people who are also on Telegram. As soon as a user has a wallet, they can deposit some coins into it and start sending crypto to other users immediately. The native PAR token is one of many cryptocurrencies that users can send on the wallet, with Bitcoin, Bitcoin Cash, and Dogecoin being some of the other options.

At press time, the PAR token was trading for $0.000411 after a 4.28 percent drop in prices. The cryptocurrency held a total market cap of $145,841, with a 24-hour market volume of $1,800. The project has begun getting widespread attention with users such as Eustace Bagge stating on Twitter:

“I have been a ParJar user for over a year, and think it is by far the best Telegram integrated project. Useful and at the same time easy to operate, it has really improved my cryptocurrency experience, and has exposed me to a wonderful community of people. The team has a work ethic that is sorely lacking in the cryptocurrency space, and even regular business.”

Disclaimer: The presented information is subjected to market conditions and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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