Bitcoin

Chronicle of an announced death

When Gabriel García Márquez wrote the unfortunate story of Santiago Nasar and his death, he was concerned with cryptocurrencies, blockchain technology, and the crazy story of Telegram and its TON network. The story of TON and its gram tokens They are very similar to the tragic ending that Nasar had in the lyrics to “Gabo”. Died after many warnings.

At home: an ambitious ICO

The cryptocurrency boom in 2017 left no one indifferent. Even the consolidated companies in the market reached the market when Bitcoin approached the $ 20,000 mark.

The Russian messaging application was just one of those who saw the opportunity of the “blockchain season”, and in December 2017 they were in full swing to work on a blockchain platform and their own cryptocurrency. In early 2018, before the big hangover from the 2017 boom, he presented his intentions to the world: Collect $ 500 million for the largest private token pre-sale ICO has ever made.

Chronicle of an announced death
Chronicle of an announced death

However, his projections remained. In the first private sale, the Durov brothers stand behind Telegram It managed to raise more than $ 850 million with 81 investorsAmong them was the Russian oligarch Roman Abramovich, who was recognized for his close relationship with President Vladimir Putin and as the owner of Chelsea FC.

To avoid future legal issues (issues like the ones that led to the project being discontinued today), the team behind TON has decided to waive its gram token offering to the U.S. Security and Exchange Commission . In particular They were guided by the exception to Rule 506 (c) that arises in the event that the investors in the project are “accredited investors”.

What does a reputable investor include? Before proceeding with the telegram death report, you must stop to answer this question. According to the SEC, accredited investors can be:

  1. Banks

  2. Private business development company

  3. Any director, officer or general partner of the issuer of the securities concerned

  4. Any natural person whose individual assets exceed $ 1 million

  5. Any natural person with an individual income of more than $ 200,000

After “covering their backs”, the Durov brothers thought so $ 850 million was insufficient and they raised a second private presale to raise another $ 850 million from 84 qualified investors. And in the middle of crypto winter, the Durov brothers managed to collect the entire amount raised. Telegram had over $ 1.7 billion in his accounts. Once again meeting the requirements of the SEC to enable the collections to be legalized, everything seemed to indicate that the throne of the most successful ICO in history was reserved only for TON and GRAM.

Enough money to buy heaven

With $ 1.7 billion, the team behind Telegram believed that there was no need to go public and that the ICO could be considered “closed”. Likewise, the SEC would have canceled the ICO from that moment for public sale would violate the 506 (c) exemptionthat only investors of the above type can participate in, elements that are not closely followed in a public sale.

Development without major shocks

After collecting so much money, Telegram decided to focus on developing his project. In the middle of the cold of 2018, no telegram appeared on the front pages of the media to concentrate.

Until April 2019 The team launched a private beta test of the TON blockchain. Despite the fact that at the time of testing, there was no “full access” to the platform, some of the technicians tested confirmed a “extremely high transaction speedWithin the network. In addition, also in April They announced an alliance with Wirecard, a financial services provider based in Germany, to “develop new digital financial products”, although they later announced no further details.

In May, the team announced that the platform would be open to the public by the third quarter of the year, and even presented a new programming language exclusively for their network. In particular, the company announced this in October October 16 would be the moment when the network would finally be released to the public. On the way to October Telegramm received the support of large companies like Coinbase and CEX.io.

SEC emergency response

Unfortunately for Telegram the joy had an expiration date and that expiration date came with a letter from the SEC. On October 11, a few days after arriving on “D-Day” to launch the long-awaited public telegram network, the SEC announced that the GRAM tokens were an unregistered and therefore illegal offering for digital tokens, which meant they had to be seen before the New York Courts on October 24, 2019. From the SEC’s Compliance Department, they announced that:

“Our immediate measure today is aimed at this prevent telegrams flooding the US markets with digital tokens which we believe were sold illegally. We claim that the defendants have not provided investors with information about the business, financial condition, risk factors and management of Gram and Telegram that is required by the securities laws. “

“As soon as Telegram delivers the grams to the first time buyers, will be able to resell billions of grams to the market that is open to the investing public. Telegram and / or its affiliates will facilitate these sales on digital asset trading platforms. Once that resale is complete, Telegram will have closed its unregistered billion gram offering across multiple platforms for a dispersed group of investors. “

In addition to the tough crackdown on telegram, the US authorities have put their nails in the coffin of ICOs looking for money in the American market, recalling that “Issuers cannot circumvent the federal securities laws by simply labeling their product as a cryptocurrency or digital token“”

The action fell unexpectedly for Telegram, which assured investors of this They were lagging behind the SEC officials for months to get feedback to ensure that they could start their project with little difficulty.

Beyond the obvious complaints, however, Telegram followed the emergency instructions, suspended the launch scheduled for October 16, and informed investors would be in “temporary detention” while clarifying the regulatory landscape and litigation against the SEC.

Apparently Telegram has asked the American courts to do so rejected the SEC court ruling because their GRAMS tokens were not worth it. In particular, he called for the status quo of his offer to be maintained and his process to continue. For reasons of interest, the company’s legal team stated at the time that the company had not conducted an ICO.

In response to Telegram’s counterclaim, the SEC requested the courts to postpone the hearing scheduled for October 24 until a later date. As soon as the request was received, the court that had heard the case found that between the February 18-19, 2020 would be the first hearing of the process.

However, it was not quiet until February. The lawsuit between the SEC and Telegram continued, although they did not have the first hearing between the two. E.In November, Pavel Durov and other Telegram executives were required to submit statements to the SEC and judicial authorities to respond to the case in question.

It wasn’t until the beginning of the year, on January 2, that the SEC telegram dealt a blow by asking for details how the $ 1.7 billion that investors had given them had been spent. The court gave Telegram’s lawyers 24 hours to respond, and they mentioned it very quickly The application had to be rejected because it constituted an “unfounded examination”.

And this wasn’t the only blow the SEC hit in 2020. Later came to question the development of the TON Blockchain and GRAMS tokensIt is mentioned that the company “has not provided evidence of the development status of the blockchain TON” and that many uses for the GRAM tokens have also not been proven. Included The SEC rated the tokens with donuts to understand that they were insignificant.

The Tribunal gives its word

Finally, the court ruled in March 2020 and the remainder did not go to the telegram side. After the court order, Telegram was only able to issue its GRAM tokens in June. The court literally stated that:

“Considers that the Securities and Exchange Commission has shown that the contracts and agreements in question, including the sale of 2.9 billion grams to 175 buyers in exchange for 1.7 billion, are highly likely to succeed US dollars, part of a, are another plan to distribute these grams in a secondary public market that would be supported by Telegram’s ongoing efforts, taking into account the economic circumstances of the Howey test, and the Court believes that the framework of this plan Reselling the grams on the secondary public market would be an integral part of the sale of securities without a mandatory registration declaration“”

As part of a “program” that would sell these tokens to the public, the court found:

“Selling telegram grams to first-time buyers who act as legal subscribers is the first step in, and as such, a continuous public distribution of securities Telegram cannot benefit from an exemption from the registration obligation according to Section 4 (a) or Rule 506 (c).“”

The team of lawyers behind Telegram did not sit idle and decided to appeal the decision they had made in court. As well The development team “defiantly” announced that the decision could not stop the introduction of TON and GRAMS tokens worldwide.

However, this ambition was only planned after the SEC The courts said the ban on issuing GRAMS tokens applies to everyone, not just American investors. A decision that in one way or another exceeded American jurisdiction and expanded into a kind of “global” jurisdiction.

The last lunge

With the judicial decision by the American authorities, which prohibited practically every kind of act, The telegram ended with hands and feet bound. Pavel Durov made a statement on May 8, accusing the United States of being a “police state”. The same day that Telegram agreed to deliver the documents related to the purchase and distribution of the ICO tokens to the SEC.

The day before, on May 7, the TON community launched a free version of the TON blockchain together with free tokens. The community stated that the network was started independently of Durov and Telegram in general, which demonstrated its “decentralization” as a network.

Finally, on May 12, Durov himself confirmed the transfer of the company to the SEC by posting an article entitled “What was TON and why is it over?And there you explain that The company does not use the Telegram Open Network and GRAM tokens. The Russian-born was again very critical of the American system and how dependent the world is on its system.

As an epitaph, Durov mentioned that he wanted him Happiness “to everyone who is fighting for decentralization, balance and equality in the world. They are fighting the right fight.”and mentioned that this fight “to be the most important of our generation. We hope that they succeed where we failed“”

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