The TON project is declared terminated! But the community will continue to develop and issue coins

Telegram CEO announced the termination of the TON project. TON Labs Chief Technology Officer Mitja Goroshevsky said that he will continue to develop TON and will distribute tokens globally.

Written by: Zhang Gaijuan

At around 1 am today, Pavel Durov, CEO and founder of Telegram , an instant messaging tool, announced that he would terminate the blockchain platform TON developed by his team. Durov said that the Telegram team no longer participates in the blockchain project, and any future blockchain projects using this name will have nothing to do with the Telegram team.c66bfc92621e5df2888061c73ea55dc3_SJBkO3T.jpg-articleImage source: Durov’s letter

After the news was released, the price of GRAM futures on the Bitforex exchange plunged, and it fell by more than 90% in the past 24 hours as of the time of publication. Prior to this, GRAM futures have been listed on 9 exchanges including Bitforex, Lbank, Bihodl, CoinBene.1c651fb0b4645c36b713e5fedfb61407_KR2UFIG.jpg-articleImage source: Bitforex

Court injunction is the main cause

So, what is the main reason for Telegram to terminate the TON project?

Durov pointed out that the main reason for announcing the termination of the TON project was an injunction by the US court. Moreover, the US court declared that TON’s cryptocurrency Gram cannot be issued not only in the United States, but also globally.a52edce53baa5b1b834148656aa1542b_sq0cvRi.jpg-articleImage source: Durov’s letter

Lianwen previously reported that on March 24 this year, in the case of “Telegram raised US $ 1.7 billion through the issuance of Crypto currency in 2018,” New York federal judge P. Kevin Castel issued a preliminary injunction ruling on the issuance of GRAM tokens. Violation of US securities laws should not be exempted. The court specifically ruled that, considering the economic reality in the Howey test, the court held that, in the context of the fundraising plan, reselling Grams to the secondary market was also part of a violation of US securities laws. By conducting a Howey test on the facts and circumstances of the fundraising work, the court further found that rational buyers were not willing to pay $ 1.7 billion to buy Grams, but only to store or transfer value. To this end, Telegram launched a program to maximize the willingness of initial buyers, which creates a structure that maximizes the value of these buyers when reselling on the open market.

The U.S. court ’s involvement was due to the official filing of a lawsuit against Telegram by the US Securities and Exchange Commission (SEC) in October 2019. The SEC alleges that the $ 1.7 billion that Telegram raised for TON from investors was an unregistered securities offering that violated the Securities Law, so it was illegal. The reason is that once Telegram delivers Grams to the original buyers, they will be able to resell billions of dollars of tokens to investors on the open market. The SEC believes that the structure of the non-public offering stimulated the development of the secondary market prior to the launch of the TON blockchain, and issued a temporary restraining order on the Gram offering. Affected by this, Telegram’s plan to deliver Grams tokens to investors was delayed by 5 months until April 31, 2020 (according to Telegerm’s token purchase agreement, TON was originally scheduled to go online before October 31, 2019). Since then, Telegram has been deeply involved in legal disputes with the US SEC.

After being banned by the US court, Telegram sought more detailed details of the ban from US regulators in an effort to sell tokens to non-US investors. In a letter to Judge Castel on March 27, lawyer Alexander Drylewsky , representing Telegram, asked the court to clarify whether the ban applies to TON’s non-US investors.

The court documents show that of the two rounds of financing in February 2018 and March 2018, about a quarter ($ 424.5 million) of the US $ 1.7 billion raised by Telegram came from US investors. Telegram believes that the remaining funds raised should not be subject to US securities laws. Telegram stated that the company is willing to take measures to isolate US investors while still fulfilling its obligations to non-US investors. In the letter, “The defendant will take safeguards at the request of the court to prevent future non-US private equity buyers from reselling Gram tokens to US buyers.” For example, non-US investors only intend not to be in the US The Gram can only be received in the case of resale. Telegram may take measures such as configuring the TON Crypto wallet to exclude US investor addresses.

However, on April 29, Telegram once again postponed the release of the blockchain project TON, announcing that the new launch date will be postponed to April 2021.

And just on the 7th of this month, Telegram finally agreed to submit a large amount of document information required by the United States Securities and Exchange Commission (SEC) before May 20, including Telegram ’s distribution of Gram tokens in 2018 and initial investors. Signed purchase agreements, bank records and financial statements. It is worth noting that in January of this year, the US market regulator asked the court to order the cryptocurrency project Telegram to disclose the bank records of the funds used in the past two years, but Telegram refused to answer questions about investor funds allocation.

However, an article written by Durov stated that the US court announced that TON’s cryptocurrency Gram cannot be issued not only in the United States, but also globally. This means that Telegram asked the court to clarify whether the ban applied to TON’s non-US investors’ actions failed.

Chain News Note: Earlier, according to a report filed by the United States Securities and Exchange Commission, Telegram completed the first round of private placement with a TON token price of 0.33 US dollars in January 2018. At that time, 81 investors participated , Raised about 850 million US dollars. At the end of March 2018, Telegram completed the second financing at a unit price of US $ 1.37. A total of 94 investors participated and raised funds of US $ 850 million.

Telegram pointed out in the application document that the financing was to develop the “TON Blockchain” and to develop and operate the Telegram chat tool.

According to information obtained by traditional financial media such as Bloomberg and the Financial Times, among the two rounds of $ 1.7 billion in financing, there are many old-fashioned Silicon Valley VCs and famous investors, including Sequoia Capital, Benchmark, and Facebook. , Twitter’s Yuri Milner, and eBay founder Pierre Omidyar. So far, these institutions have not confirmed their investment information.

Later, blockchain media BLOCTV quoted insiders as saying that Lauren Powell Jobs, the widow of Apple founder Steve Jobs, Roman Abramovich, owner of the Chelsea club, and Mikhail Abyzov, former minister of open government affairs in Russia, all participated in the Telegram blockchain project.

Regulatory issues cannot stop the release of the TON blockchain, although Telegram is not involved

It is worth noting that after the US court rejected Telegram from issuing its tokens, the TON community began to plan B.

Previously, representatives of TON Community Foundation TON Labs and announced that if Telegram’s plan to launch TON was frustrated by legal disputes with the US Securities and Exchange Commission (SEC), they were ready to launch the main TON blockchain network.

On May 7, TON’s core infrastructure development team, TON Labs, announced that it would open source the main components of TON OS on GitHub on the second day. TON OS is the operating system of the TON blockchain, designed to support blockchain applications and also allows users to create applications that are automatically compatible with the blockchain platform. In addition, TON Labs also plans to issue the decentralized browser Surf, pledge pool DePool, and TON Cash tokens within one month.

Subsequently, the decentralized community Free TON composed of software developers, 13 validators and users released the “Free TON Blockchain”. “Free TON Blockchain” seems to be based on the Telegram blockchain project TON. According to the announcement of TON Labs, the community will also provide users with free TON tokens. The Free TON community says that anyone can join the network. However, individuals and organizations in the United States cannot join the network at this stage.

However, Alexander Filatov, CEO of TON Labs, told Coindesk that Telegram was not involved in launching the network.

In addition, Durov also emphasized in an article published this morning, “Telegram will no longer participate in the development of TON. Although there may be a technical network based on TON, we will not have any contact with them, nor It is too possible to support them in any way. “46fd4855ff6751b393063efdd6e7dc1e_SdZdyPX.jpg-articleImage source: Durov

It is worth noting that according to Cointelegraph, after Durov announced the end of TON, Mitja Goroshevsky, chief technology officer of TON Labs, said, “It is clear that Durov was forced to issue this statement. But I agree with all his views. , Especially the final statement on decentralization, which is completely in line with Free TON ’s goals. We will continue to develop and develop TONs and distribute tokens globally. Because this is the right thing to do. ”

However, Yakov Barinsky, chief executive of the consulting firm HASH CIB, said that without Telegram’s participation, the entire project would lose its appeal.

Telegram has not announced the refund

How will Telegram refund the initial investor if Gram tokens cannot be delivered?

Durov did not announce the refund method for the initial investors of the TON project. However, after Telegram decided to postpone the release of TON until April 2021, Telegram gave investors two options:

First, investors have the right to receive up to 72% of investment funds. In October last year, TON investors had a right to choose to get back about 77% of the funds, but at that time they did not request a refund, but agreed to postpone the launch of TON until April 30, 2020. Durov told investors that between October last year and April this year, (if a refund is required) only 72% of the investment will be refunded.

The second is to renew a loan agreement. If investors choose to lend their initial investment funds to Telegram, they will receive 110% of the original investment by April 30, 2021.

In addition, if regulators continue to prevent the release of TON next year, Telegram will use equity to repay investors.

Then, the Russian media The Bell received an email from the Telegram team to investors. After Telegram decided to postpone the release of the blockchain project TON, the only option currently available to US investors is to obtain 72% of the investment funds. This means that Telegram only offers US investors the option to refund 72% of their investment.

Earlier, according to Just Security, if the court finally ruled that Telegram’s operation was illegal, Telegram would face huge fines and have to repay investors who had previously participated in the project.

In addition, Bplus Singapore previously stated that in Gram’s purchase agreement, Telegram stated that if TON cannot be activated before October 31, 2019, the token contract will be considered invalid and will require the return of funds to investors. However, the “force majeure” clause in the purchase agreement may invalidate the above undertaking. However, the “force majeure” mentioned in Gram’s purchase agreement includes the legal or regulatory actions of government authorities in addition to the common natural disasters, terrorist threats and war outbreaks.

The terms clearly state that Telegram shall not be liable to the buyer for any failures or delays in the following cases: (d) applicable laws or regulations; (e) any action taken by government authorities.

But is such a “force majeure” clause suspected of overlord clause? In practice, will investors be willing to give up? It’s a tough problem for Telegram.

Durov announces the termination of full text translation of TON

Chain smell of Durov text was translated. The title is “What is TON and why did it end?” “. The text is as follows:

In the past two and a half years, some of our best engineers have been working on developing the next generation blockchain platform “TON”, and we plan to name its cryptocurrency “Gram”. TON aims to share the decentralized principles first proposed by Bitcoin and Ethereum, but it is far superior to them in terms of speed and scalability.

We are very proud of the technology we created because it allows an open, free, and decentralized exchange of values ​​and ideas. After TON is integrated with Telegram, it is likely to completely change the way people store and transfer funds and information.

Unfortunately, the US court blocked the issuance of TON. Imagine a few people put their funds together to build a gold mine, and then split the gold in it. Afterwards, the judge told the builders of the gold mine, “Many people have invested in the gold mine because they want to seek profits. They do not want to hold the gold all the time, but want to sell it to others. Therefore, they are not allowed to give gold . “

For you, this may not make any sense. But this really happened to TON (mine), its investors and Grams (gold). The judge used this reasoning to rule that people should not be allowed to buy or sell Gram like buying or selling bitcoin.

The US court even announced that Telegram cannot distribute Gram not only in the United States, but also globally. why? The court said that after the TON platform is launched, American citizens may find ways to access the TON platform elsewhere. Therefore, to avoid this, even in other countries around the world where the TON is very friendly, the US courts will not allow Telegram to distribute Gram tokens.

This court decision means that other countries have no sovereignty or power to decide what is good or bad for American citizens. Imagine if the United States suddenly decided to ban coffee, and asked some Americans to go there and asked to close the Italian coffee shop, then no one would agree to this decision.

However, despite this, we made a difficult decision-not to continue with TON.

However, American judges are right on this matter-we, people outside the United States can vote for our president and our parliament, but in terms of finance and technology, we still rely on the United States Not coffee). The United States can use control of the US dollar and the global financial system to close any bank or bank account in the world, and can delete applications in the App Store and Google Play through control of Apple and Google. Therefore, yes, other countries do not have complete sovereignty over their territory. Unfortunately, we, 96% of the world ’s population, live in other countries or regions and depend on decision makers selected by 4% of Americans.

Of course, this situation may change in the future. But today, we are caught in a vicious circle. You cannot bring more balance to an overly concentrated world. But we did try it. We leave it to the next generation of entrepreneurs and developers to let them learn and learn from our mistakes.

I wrote this article to officially announce that Telegram’s active participation in TON has ended. You may see (or may have seen) use my name or Telegram brand or TON abbreviation to promote their projects. Don’t trust your money or data to them. Neither the current or previous members of our team are involved in any of these projects. Although there may be a technical network based on what we built for TON, we will not have any contact with them and are unlikely to support them in any way. Therefore, please be careful not to let anyone mislead you.

At the end of this article, I wish all those who strive for decentralization, balance and equality in the world good luck. You are having a correct “battle”, and this is probably the most important “battle” of our generation. We hope you succeed where we failed.

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