With the world slowly coming out of the COVID-19 lock down and the economy hopefully on the path to recovery there have been many developments in the blockchain / crypto space over the last few weeks.
Telegram – Mixed Messaging and Maybe the End of the Line
Telegram, the messaging application which last year raised about $1.7 billion toward the launch of a proposed digital asset called GRAMS that would operate on a proprietary blockchain called TON, has been one of the most active stories of the last few months.
In our last update, we reported that the Southern District of New York issued a preliminary injunction blocking Telegram’s proposed launch of its TON blockchain and related distribution of Gram tokens. This injunction follows an emergency restraining order obtained by the SEC in October 2019 delaying the launch of the TON blockchain.
At that time, Telegram delayed the launch to April 30 and asked investors to approve the delay and to revisit the issue at the new start date, or not approve the delay, in which case Telegram would give investors the ability to terminate their purchase contracts for a percentage of the purchase price (reported to be 77% of the purchase price in October and 72% now).
This termination right triggered on April 30, but Telegram extended to its investors yet another option – those investors who do not wish to terminate would instead be repaid 110% of their purchase price a year from now if the blockchain has not launched or the issuance is still prohibited.
Telegram then changed course – while investors previously had the option to be repaid in tokens, which would amount to more than their initial purchase price, Telegram rescinded that offering, telling investors in its TON blockchain they would not be paid back in tokens and, in addition, that Telegram was looking to buy out American investors immediately.
A few days later, TON Labs, a startup that helped Telegram establish the test network for the TON blockchain and is comprised of investors in Telegram’s and or the token presale, attempted to salvage the project and announced its launch of a free version of the TON blockchain. This unofficial fork, called Free TON (and the “The Open Network” rather than “Telegram Open Network”), does not officially involve Telegram at all and utilizes “TON crystals” rather than grams as the native virtual currency. Since Free TON is purportedly identical to the original token developed by Telegram through its open source code, the potential for profit investors who prepaid for Gram tokens has been largely eliminated.
On Tuesday, May 13, Telegram made an announcement that while unsurprising has sent shock waves through the world of fintech, Telegram was discontinuing the blockchain project. It appears that Telegram might still be associated with Free TON, as the TON Labs website states that the concept behind the project “implies gradual integration of Telegram and TON.” It appears…
Read more:BitBlog Bi-Weekly Update: May 19, 2020
