Telegram Quits TON in Face of Regulatory Hurdles
Recent hurdles in the development of the Telegram Open Network have proved too difficult for the company to overcome
Following years of struggle with the United States Securities and Exchange Commission (SEC), Telegram has decided to call it quits on its crypto-focused subsidiary, the Telegram Open Network (TON). The company is no longer actively involved in TON.
Pavel Durov, founder and CEO, warns netizens to be cautious of sites and scammers using his name, the Telegram brand, or the TON abbreviation to promote their projects.
“You may see – or may have already seen – sites using my name or the Telegram brand or the ‘TON’ abbreviation to promote their projects. Don’t trust them with your money or data.” Durov’s announcement reads.
The Telegram Open Network (TON) was designed to provide access to the cryptocurrency space for anyone with a smartphone. This is a similar approach to the Facebook’s Libra project, which has also faced significant challenges throughout its development.
In October 2019, the SEC ordered the company to halt sales of its cryptocurrency (dubbed as the Gram) after it was unable to register an early sale of USD$1.7 billion in tokens before the launch of the network. According to Telegram, these funds were raised in a series of pre-ICO offerings back in 2018. However, Telegram ended up cancelling the ICO, one of the reasons being due to the increased scrutiny from the SEC.
Durev voiced out his opinions over the ruling in his announcement, maintaining that American courts should not have the power to prevent the sale of cryptocurrencies outside of US borders. He also urged others in the cryptocurrency space to take up the fight against decentralisation in Telegram’s stead, citing this battle as “the most important battle of our generation” and expressing hopes that “you may succeed where we have failed.”
Previously, it was reported that the launch of the TON project was delayed to April of 2021. This is its second delay, following a lawsuit filed by the USEC in the Southern District of New York as well as an emergency restraining order in October 2019, which delayed the launch to April 2020.