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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.