Telegram abandons billion-dollar blockchain project amid SEC probe

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Telegram founder Pavel Durov has announced that the company's billion-dollar TON blockchain platform has been called off due to the company’s ongoing legal tussle with the US Securities and Exchange Commission (SEC).

Telegram’s plan hit a wall after the SEC won a preliminary injunction in a US court against the two-and-a-half-year-old project. This stated that its Gram cryptocurrency cannot be sold in the US, with TON also blocked in order to restrict US citizens from finding alternate ways to access it. 

Much like Facebook Libra, TON was a blockchain platform aimed at offering decentralised cryptocurrency to any user with a smartphone. However, both TON and Libra have faced scrutiny from regulators.

TON abandoned

In the case of TON, the SEC had earlier raised an objection stating that Telegram may “flood the markets with billions of . . . (coins) through an unregistered offering of securities. Without a registration statement in place, Telegram’s planned distribution would violate the Federal securities laws.” 

Durov had wanted to integrate Telegram with TON, stating that the collaboration, “had the potential to revolutionise how people store and transfer funds and information.” 

“Telegram’s active involvement with TON is over. 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," he said in a statement.

Distancing both himself and TON network from independent parties trying to build their version TON network, writing, “While networks based on the technology we built for TON may appear, we won't have any affiliation with them and are unlikely to ever support them in any way. So be careful, and don't let anyone mislead you."

While Durov announced that “No present or past member of our team is involved with any of these projects,” he also urged his peers to take the most important battle of the generation ahead hoping that they win where he failed.

Via: The Verge

Jitendra Soni

Jitendra has been working in the Internet Industry for the last 7 years now and has written about a wide range of topics including gadgets, smartphones, reviews, games, software, apps, deep tech, AI, and consumer electronics.