Instant messaging giant Telegram has recently revealed that it will no longer be continuing with its blockchain project ‘TON.’ The company has cited regulatory pressure as the primary reason for the reversal.
In an announcement on the company blog on Tuesday, Telegram founder Pavel Durov said that a U.S. court has stopped the Telegram Open Network (TON) from materializing.
I am writing this post to officially announce that Telegram’s active involvement with TON is over.
TON Scuppered by the SEC
The statement opened with a brief history, stating that the company had spent over two and a half years developing a ‘next-generation blockchain platform’ with a cryptocurrency called Gram.
Using the analogy of investors putting money together to build a gold mine, and later split the gold, Durov said that a judge had deemed it unlawful since the investors would sell that gold for profits.
The courts appeared to take umbrage at Gram, and its distribution in and beyond the US. He added that the court ruling implies that other countries do not have the sovereignty to decide what an acceptable investment is for their own citizens.
Durov has taken particular resentment at the power the U.S. wields over other countries in regards to the global financial system.
The US can use its control over the dollar and the global financial system to shut down any bank or bank account in the world. It can use its control over Apple and Google to remove apps from the App Store and Google Play.
The Securities and Exchange Commission won a preliminary injunction in March, in which it claimed that Telegram had sold unregistered securities.
Earlier this month, the company u-turned on a promise that it would be paying out tokens to investors at launch. At the time, Telegram said that it wanted to buy out American investors immediately.
OKEx Chief Strategy Officer, Alysa Xu [@AlysaXuOKEx], noted that concerns were being raised in China;
Shame. Another quality project, #TON Blockchain by @telegram, fell down due to regulations. More worried about the retail investors who subscribed the #GRAM futures issued as IOU by some irresponsible crypto exchanges.
Xu added that the TON Chinese communities on WeChat were complaining and mourning over the closure of TON, while also raising concerns about immediate refunds of Gram futures.
There was no mention of refunds in the announcement and Durov closed the post by wishing luck to those still fighting for decentralization, adding;
This battle may well be the most important battle of our generation. We hope that you succeed where we have failed.