Telegram, one of the world’s leading messaging apps, has been forced to delay the unveiling of the Telegram Open Network (TON) and issuing the GRAM token. Telegram’s Open Network was one of 2018’s hottest projects, garnering over $1.7 Billion dollars of investment over 3 phases. Many viewed telegram’s networks as a way to bring more masses into the decentralized ecosystem, as the messaging app had over 400 million monthly active users. The $GRAM token was planned to be integrated directly into the Telegram App along with support for smart contracts. On top of this, TON also offered smart contract features – allowing for Decentralized Finance (DeFi) and other applications. The network was originally planned to be released on April 30th, but the Russian based company released a letter to their investors (in Russian) on the 29th April, saying this would have to be postponed for another year at the latest.
This news comes as a disappointment to many investors who were expecting TON to rival projects such as Facebook’s Libra (also delayed). These projects directly compete with Central Bank Digital Currencies, which are gaining traction with the launch of China’s DCEP. Although many may have attributed the change in release date to the current Coronavirus pandemic which has brought the world to its knees, it is in fact down to regulatory concerns.
Legal troubles with the US Securities and Exchange Commission (SEC)
The letter claimed that the decision was brought about, “in light of the recent US district court decision.” The case they are referring to is last month’s decision by a US judge that the company could not proceed with any blockchain projects or issue tokens until they resolve their dispute with the US Securities and Exchange Commission (SEC).
Last October the SEC sued Telegram for violating its laws and selling its gram tokens illegally. The commission was alerted to Telegram after they made $1.7 billion from their initial coin offering (ICO) of their Gram token. This pre-selling was not authorized by the SEC and was out of step with securities law.
This SEC problem is something Telegram is finding hard to shake off. They were forced to delay their TON blockchain before, going from October 2019 to April 2020. Now they have been forced to delay even further.
Each time the network is delayed, Telegram and the CEO, Pavel Durov, are also losing money. The latest delay has really hit them hard. Per the letter to investors, those who have added to the project will receive 72% of their money back. However, those who wait until April 2021 will see 110% of their initial investment returned.
However, how the money or Gram tokens are returned to investors is a little up in the air. The letter looked to calm investors, who made their decisions last Friday, saying: “We are continuing to engage in discussions with the relevant authorities in connection with TON and the issuance of tokens to the original purchasers.”
The letter continued: “If we obtain the relevant permissions prior to April 30, 2021, purchasers who opted for the loan will have the further option to receive Grams or potentially another cryptocurrency on the same terms as those in their original Purchase Agreements (to the extent allowed by applicable regulatory restrictions).”
Either way, this blockchain and cryptocurrency creation must be a costly venture for Durov, especially now investors funds are being reimbursed. The Telegram CEO said in the letter that he would be paying off the debt incurred through equity.
“With 400 million monthly users and organic growth of 1.5 million sign-ups each day, Telegram is the # 1 most downloaded social media application in 27 countries… Based on the valuation of messaging services at similar stages of their growth, we believe Telegram’s equity value will exceed the aggregate amount of its potential debt resulting from this offer by at least several times,”Pavel Durov
Fake Telegram Refund services
After the announcement of the GRAM refund, several scams have emerged offering fake “Telegram Token Refunds”. These services typically ask victims to pay them in advance with the promise of a larger sum refund. These of typical cryptocurrency scams that will immediately run away with the victim’s funds.
According to the latest investor newsletter, TON’s earliest launch date would be 2021. TON has suffered various delays due to regulatory issues, such as the pending investigation by the US Securities and Exchange Commission (SEC).
For legitimate purchasers of GRAM, there is a 110% refund for investors (non-american) and 72% refund for american investors. Please be-aware of Fake Telegram Refund services that ask you to pay money.