Russian private equity fund Da Vinci Capital is suing messaging app Telegram for issues related to refund of investments in the Telegram Open Network (TON). The case will be heard in London.
Managing partner Oleg Zhelezko, in an interview with the RBC TV station, said that the reason for the lawsuit was that the refund process was not made “completely correctly.” He said that the refund offer only arrived 24 hours before the deadline. As a result, it was difficult to analyze the documents and form an appropriate decision.
The communication behind the refund process was conflicting, Zhelezko said,
“There were a lot of difficult communication moments, and it was very difficult for investors to make the right decision about whether to take the money back or convert it into credit.”
Investors from Da Vinci Capital sent a notice to the company’s executives in February. Sources have said that investors have allegedly asked for a refund of $20 million.
The firm’s management also reportedly contacted the company’s management team. However, all attempts to amicably resolve the dispute were turned down. This led to the inevitable decision of a lawsuit.
Telegram continues to face consequences
Telegram had to shut down its Telegram Open Network (TON) after an investigation by the United States Securities and Exchange Commission (SEC) in 2020, which deemed the token a security. While Telegram accepted the decision, it did so begrudgingly.
Telegram’s decision to launch the TON was a major headline maker when it was announced. The 2019 ICO raised a staggering $1.7 billion from investors and quickly attracted the attention of authorities. The SEC said that it had not registered as a security, according to law.
Founder Pavel Durov, in a lengthy post, derided the decision and said that it could not make the deadline. Telegram’s final decision was to return 72% of investors’ funds or choose to keep it and return 110% of the investment by the deadline of April 30, 2021. Telegram also agreed to pay a fine of $18.5 million.
The SEC investigation of Telegram was a major talking point in 2020, and it highlighted the tough stance that it was taking against some blockchain projects. More recent remarks from the SEC, as well as from other agencies, indicate that it will continue to monitor the market closely.