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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.