Updated: Telegram Abandons Telegram Open Network and Gram Tokens

Published at: May 12, 2020

Per a May 12 message from Telegram CEO Pavel Durov, the company is calling it quits on the Telegram Open Network (TON) and the linked Gram tokens following a lengthy battle with the United States Securities and Exchange Commission.

After announcing the TON network and Gram token back in 2017, Telegram is now officially terminating its involvement with the project, Durov said.

U.S. court breaks sovereignty of global jurisdictions, Durov argues

In the post, dubbed “What Was TON And Why It Is Over,” Telegram CEO said that they made the decision in response to a U.S. court prohibiting Telegram from distributing its Gram tokens anywhere in the world. Durov wrote:

“The US court declared that Grams couldn't be distributed not only in the United States, but globally. Why? Because, it said, a US citizen might find some way of accessing the TON platform after it launched So, to prevent this, Grams shouldn’t be allowed to be distributed anywhere in the world – even if every other country on the planet seemed to be perfectly fine with TON.”

In the post, Durov explicitly criticized the U.S. government’s involvement and efforts to prevent the launch of a project based on principles of decentralization pioneered by Bitcoin (BTC) and Ethereum (ETH).

Reiterating his recent negative remarks about the U.S., Durov wrote that the global community is still dependent on the U.S. when it comes to finance and technology. “Unfortunately, we – the 96% of the world’s population living elsewhere — are dependent on decision makers elected by the 4% living in the U.S.,” he added.

Telegram CEO also emphasized that the court decision breaks sovereignty of jurisdictions around the world, saying:

“This court decision implies that other countries don’t have the sovereignty to decide what is good and what is bad for their own citizens. If the US suddenly decided to ban coffee and demanded coffee shops in Italy be closed because some American might come there – we doubt anyone would agree.”

Brief history of Telegram and SEC

By abandoning the TON project, Telegram seems to have lost their long-running legal battle to the U.S. SEC. The SEC brought an action against Telegram in October 2019, a few days before the firm was planning to launch the TON network. In the lawsuit, the SEC accused Telegram of violating the U.S. securities law by conducting its $1.7 billion initial coin offering in 2018.

In March 2020, a U.S. court recognized that the SEC had a good chance of proving that Telegram’s GRAMs were unregistered securities. Telegram CEO Pavel Durov subsequently suggested a reimbursement plan on April 30, apparently accepting the court’s decision.

Telegram leaves TON soon after a community launches a free version of the TON network

Telegram’s departure from the TON project may not be the end of the Telegram Open Network’s story. Durov’s sudden announcement comes after the Free TON, an independent community of validators, launched the TON blockchain independently from Telegram on May 7.

Mitja Goroshevsky, a key member of the Free TON community and CTO at TON Labs, a third-party group of TON infrastructure developers, commented on Durov’s announcement:

“Well it's quite clear. Pavel was forced to do this statement. Yet I agree with every sentiment it has and particularly with the last statement regarding decentralization. This resonates exactly right with Free TON goals. We will continue to develop, build and distribute TON around the world. We will get it into the hands of millions of people. Because that is the right goal!”

Regarding the Free TON launch, Durov clearly said that Telegram will not have any affiliation with any entities involved in further deployments of the TON technology. Concluding the post, Telegram CEO appeared to encourage the independent launch of the TON network, saying:

“I want to conclude this post by wishing luck to all those striving for decentralization, balance and equality in the world. You are fighting the right battle. This battle may well be the most important battle of our generation. We hope that you succeed where we have failed.”

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