Telegram opens lid on TON project amid SEC spat: ‘Grams won’t help you get rich’
Telegram has published details concerning TON in a bid to clarify the project while embroiled in a regulatory case with the US Securities and Exchange Commission (SEC).
The encrypted messaging app service has kept the project under a relatively tight lid until now, with details of the Telegram Open Network (TON) blockchain system limited to Grams, the cryptocurrency connected to Telegram, an Initial Coin Offering (ICO) launched in January 2018 that generated funds for the project, and a planned public release that had to be delayed until April 2020 due to SEC’s complaint.
Only days before the intended release, SEC stopped the project in its tracks and obtained a temporary restraining order against the company based on claims that Telegram’s ICO violated the US Securities Act as an unregistered securities sale.
SEC alleges that Telegram also did not provide investors with the information relating to TON’s “business operations, financial condition, risk factors, and management that securities laws require.”
In light of “recent events,” Telegram has now revealed additional details on the TON project. In a blog post on Medium, the company has first tackled Grams on the insistence that the token should not be considered an investment product.
“You should NOT expect any profits based on your purchase or holding of Grams, and Telegram makes no promises that you will make any profits,” the post reads. “Grams are intended to act as a medium of exchange between users in the TON ecosystem. Grams are NOT investment products and there should be NO expectation of future profit or gain from the purchase, sale or holding of Grams.”
In addition, Grams do not represent equity, ownership stakes, rights, or shares. In the typical way that cryptocurrencies operate, Telegram further warns that “Grams won’t help you get rich,” and you should expect market fluctuations.
After launch, the TON blockchain itself will be opened to third-party developers as a decentralized project. Telegram says there is no guarantee that the company will have any hand in future development after launch and the code will be both open-source and available to view by the public.
“We hope that as a result of this project Grams will become a true complement to traditional currencies, improving the speed, efficiency, and security of everyday commercial transactions globally,” Telegram says. “We believe that the TON Blockchain technology will create a stable ecosystem and represents a significant improvement upon previous platforms in terms of speed, usability, and scalability.”
When it comes to the anticipated integration of a cryptocurrency wallet within the Telegram messaging application, the firm now says the TON wallet will be made available “solely on a standalone basis” — at least, until the SEC issue is resolved.
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“Telegram may integrate the TON Wallet application with the Telegram Messenger service in the future to the extent permitted under applicable laws and governmental authorities,” Telegram says.
Furthermore, Telegram said the organization “is under no obligation, and makes no promise or commitment, to ever establish a TON Foundation or similar entity in the future.”
Earlier this month, the US regulator filed a court order seeking the means to compel Telegram to explain how over $1.7 billion obtained from investors through the ICO has been spent. According to SEC, Telegram has, so far, provided no financial data.
On January 6, the motion to compel Telegram for full bank record disclosure was denied with the caveat that the company must still comply with foreign data privacy laws.
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