The plane is going nowhere. All the way to develop Telegram Open Network

Telegram Open Network

In late June, Pavel Durov said that his company had returned more than $1.2 billion to ICO investors. In the author's longrid we tell how in the last 2.5 years the project has gone from incredibly promising to failed

On the evening of June 25, Telegram creator Pavel Durov announcedthat the company had returned $1.2 billion to ICO investors. It must also pay a $18 million fine to the SEC and inform the financial regulator over the next three years of plans to release digital currency on the blockchain. In early 2018, when news about the TON project began to appear, few people could have imagined that it would end this way. We tell the whole story of the blockchain project from the very beginning.



Media began toappear information that Telegram is preparing to hold an ICO to raise funds for the launch of its own blockchain platform. Then it became known that the book of applications for participation is already overcrowded and the company is forced to refuse some investors. Initially, it was assumed that the messenger would receive $500 million on pre-sale tokens and $3 to $5 billion in the entire ICO.

The minimum investment was set at $20 million, and Telegram offered to invest at least $50 million to anchor investors. People who invested in the project were selected on the principle of proximity to leadership and popularity. The money raised during the ICO was planned to be invested in the development of the Telegram Open Network (TON) blockchain platform, the launch of the Gram cryptocurrency, the purchase of equipment and the development of related technologies. The company was preparing to issue 5 billion coins, 44% of which could be purchased by ordinary investors.

At the same time in the network scammers began to sell Gram. Durov had to make an official statement and explain that the tokens have not yet been issued. At the same time, TON received $3.8 billion in offers from investors.


In February 2018, the creator of Telegram reported to the U.S. Securities and Exchange Commission (SEC) about the attraction of $850 million from 81 investors under the ICO TON. At the end of the month, the company announced plans for another round of the $850 million initial offering of tokens for venture capital funds.

The price of the token in the first round was $0.35, in the second it increased to $1.3-1.5. The network for the first time there was information that future Gram holders are already reselling the rights to them on the secondary market. Later, this will be one of the reasons for the SEC's ban on the release of altcoin. The TON was originally scheduled to launch in late 2018.

The project was confirmed by one of the founders of Wimm-Bill-Danna and a member of the board of the Russian Union of Industrialists and Entrepreneurs David Yakobashili, as well as the founder and CEO of the company, Sergey Solonin. One of ton's investors was called Roman Abramovich, but his representative denied this information.

At the same time Business Insider wrote that in the second stage Telegram is preparing to raise $1.7 billion. Representatives of the messenger promised to return funds to investors if the blockchain platform is not launched before October 2019, however, the company did not guarantee that it will have enough funds for a refund.


Ton Issuer Inc. and Telegram Group Inc., led by Pavel and Nikolai Durov, reported the results of the second round of fundraising to the SEC. The minimum investment amounted to $1 million.

Vedomosti, citing sources, reported that the project planned to hold a third round of investments by the end of the year, but this did not happen. The tokens were expected to be sold at an average price of $2.2 in the last round.

RBC wrotethat people who were on any sanctions lists could not take part in the ICO. The ban also applied to the immediate family of such persons (children, spouses, parents, siblings). All potential TON investors have undergone kyC identity confirmation.


In April 2018, Telegram began to be blocked in Russia. It was reported that this was due to Durov's plans to create a completely uncontrolled financial system. Then the employee of the 12th FSB center sent a letter to colleagues in which he called the TON platform a threat to the country's security.


The Wall Street Journal reported, citing a source familiar with the situation, that Telegram received $1.7 billion from 200 private investors. After that, the company decided to refuse the open placement of tokens.

On May 9, the messenger created the first service for Telegram Open Network - Telegram Passport. It allows you to store personal data directly in the app. A week later, the company sued Florida startup Lantah LLC over the Gram brand.


Telegram sent letters to investors in which it said that the service is ready for 70%. Representatives of the messenger claimed that they had successfully completed the development of most of the critical components needed to run the TEST network TON, and the full version will be operational by the end of the fall.

The first component of TON, Virtual Machine, was 95% ready and tested, with 50% of the toolkit completed. Software to confirm the new blocks was ready for 10%, and work was also underway on the mechanisms for creating new blocks.


The investment company HASH CIB saidthat in the first stage of the ICO 2.25 billion tokens were sold at a price of $0.38, in the second - 639 million at $1.33. The next Gram was planned to sell for a minimum of $3.62, analysts calculated, based on the White Paper project.

The plane is going nowhere. All the way to develop Telegram Open Network



At the beginning of last year, the network reported that the Telegram Open Network platform and the cryptocurrency Gram can be presented within a month. Developers were preparing to launch the project in March, and Durov's team informed investors that the blockchain would be fully ready by this time, but there may be delays of 2-3 months due to the "innovative nature of development."

The first country to have a new token was to be Japan. It was reported that TON leaders continued to resolve legal issues in more than a dozen jurisdictions.


HASH Crypto Investment Bank predictedthat Gram's capitalization will rise to $29.5 billion by the end of 2019. Analysts claimed that the price of the token will increase tenfold and reach the mark of $5.9. This price was explained by the "rational network value" which consists of current and discounted added value for future years.

On February 27, Xena Exchange launched a derivative on the Gram token with leverage. Analysts of the company expected that the trading volume for altcoin will reach $3.5 billion in the first three months. In March, contracts for the cryptocurrency Telegram rose four times,their price rose to $8.25, while at the time of launch it was at the level of $2.2. The daily amount of transactions with the asset was then estimated at $100,000.


In April, it became known that the TON blockchain is in the closed stage of testing. Development teams that had access to the testet could install the network's nod.


The network has information that the platform will be launched in the third quarter of 2019. The company's developers reported the successful testing, the system fully corresponded to the consensus algorithm and stated in the white paper goals.

On May 30, a telegram Open Network test client was released in one of the sections of the project's website The developers called this version not the most relevant, but the preliminary final product. Users could create simple smart contracts and run them through a special server. It was also possible to audit existing smart contracts, send messages to them and perform various functions.


Larry Chermak, an analyst at The Block, criticized TON and said the company did not have a commercial model. Chermak pointed out that information about the possible launch of the platform appeared in the second half of 2017, when the market was at its peak, and investors actively invested in ICO. Among other things, the expert said that the majority of participants in the initial placement of Gram no longer expect to earn on this.

Also in July last year, the social network Facebook announced plans to release its own cryptocurrency. However, later under pressure from financial regulators, the company changed the model and decided to issue not one coin, but several staplecoins.


On July 10, The South Korean company Gram Asia was going to start selling Gram tokens on the Japanese Liquid exchange at a price of $4. However, Gram Asia had nothing to do with Telegram, and its implementation was not provided in the agreement to buy cryptocurrency. Liquid later said that payment would not be made until the tokens were provided.


In mid-August it became known that Gram tokens appeared on the secondary market, they were sold by investors of the closed round of ICO Telegram Open Network. CoinDesk wrote that several over-the-counter platforms, a crypto-exchange and an investment fund were getting rid of their coins.

Button Wallet has opened the first free platform for testing the blockchain network. Wallet users could get 6.6 Gram test tokens for activating the app.


The developers of Telegram Open Network have released part of the code, the blockchain validation module, as well as documentation to them. This was the last stage before the launch of the main network. The company introduced a public beta version of its development toolkit.

It turned out that any decentralized application created on the Ethereum blockchain, developers could move to the Platform Telegram Open Network. This was made possible by a special compiler Solidity, which was tested by startup TON Labs.


In early October 2019, TON developers announced in a letter to investors that it would be launched by the end of the month. The team explained that to receive the cryptocurrency ICO participants need to create a special electronic wallet by October 16.

Investors were offered to become network validators (confirm transactions in the blockchain and earn on commissions). The letter stated that Telegram or TON Foundation would not buy back tokens. Buy and sell them were supposed to be on independent sites.

Then the messenger published on its official website the rules for using the Gram wallet. The company reserved the right at any time and for any reason to disable or block the user's access to all services.

In mid-month, the SEC filed a lawsuit in federal court in Manhattan accusing Telegram of illegally distributing unregistered digital tokens in the U.S. and beyond. After that, the source of "RBC-Crypto" reportedthat the developers of TON can postpone the launch for 12 months. At the same time, it was reported that Telegram sent letters to investors, which talk about possible ways to resolve the restraining order from the SEC, including the possibility of delaying the release of the project.

The SEC then issued an official statement announcing "extraordinary measures and restrictions" on two offshore companies associated with TON tokens. The commission alleged that Telegram illegally raised $1.7 billion. Thirty-nine investors from the United States took part in the tokensale.

The company was accused of violating the securities law and demanded to issue an indefinite injunction against the project and the decision to return funds with a fine and interest to investors. A few days later, Telegram notified the court of its readiness to suspend operations relating to Gram.

On October 24, a number of media outlets wrote that TON investors agreed to postpone the launch of the platform for six months and will not demand 77% of their invested funds back. The new date for the cryptocurrency release was set for April 30, 2020. The trial in SEC v. TON was originally scheduled for October 24, but the regulator postponed it to February 19-20.


Github has a new version of the Gram wallet. The TON cryptocurrency storage app was compatible with operating systems such as Windows, macOS and Ubuntu.

On November 13, Telegram filed a lawsuit in the United States court to dismiss the SEC's claim. Representatives of the messenger argued that the regulator had to provide clear instructions on what is considered a violation of the law in the brand new legal industry.


In early December, the SEC disclosed details of Telegram management's correspondence with TON investors. It became known that many funds in the blockchain project came from Russia, CIS countries, Israel.



Earlier this year, Durov testified to the SEC. The commission alleged that $424.5 million of the $1.7 billion raised during the ICO was obtained illegally in the U.S. market.

On New Year's holidays TON issued a statement in which it once again stressed that Gram will not be a security, and its holders will not receive a stake in the company. The payment system will not be controlled by Durov's project, as it will become decentralized, and at the moment no one could buy or sell altcoin, as it will appear only after the official launch of the blockchain platform.

In mid-January, the court ordered Telegram to provide all necessary financial information at the request of the SEC. At the same time, the Liquid Exchange canceled the results of the sale of ownership rights to the yet-to-release Gram tokens held in July 2019.


Six investors who invested in blockchain start-up TON filed a motion for non-disclosure of their personalities in the lawsuit. A series of 38 documents stated that the information was irrelevant and could be detrimental to the nature of the judicial defence.

Telegram's website publishes a technical document on the consensus device in the TON blockchain, called Catchain. It was based on the PoS algorithm, which bore similarities to the protocols NEO and Cosmos. Nikolai Durov claimed that the technology was first introduced into the system in 2018 and distributed to 300 nodes around the world. Testing has shown that the network is capable of generating new blocks every 4-5 seconds.

The regulator then obtained testimony from former Telegram investment adviser John. After that, the court extended indefinitely the ban on the sale of Gram tokens.


From the previously unpublished report of Stephen McKeon it became knownthat among the investors of TON were the structures of Roman Abramovich, former minister Mikhail Abyzov and Said Gutseriev. McKeon's list includes 98 investors and nine whose names are hidden.

It turned out that in the first round of the ICO took part in the widow of Steve Jobs Lauren Powell Jobs, she invested in the project at least $5 million. In late March, The Southern District of New York Judge Kevin Castel recognized the cryptocurrency TON as a security in a preliminary decision.

Castel granted the SEC's lawsuit against Telegram and temporarily banned the transfer of Gram tokens to investors. According to the court, the first ton investors purchased tokens for sale on the secondary market for the purpose of earning. The judge specified that the company's lawyers had not been able to present convincing arguments indicating that there was no need to pre-register before the sale of tokens. Telegram challenged the court's ban on the transfer of Gram to investors.

At the end of March, the first reports began to appear that some investors are ready to withdraw from the project and get their investments back. Hash CIB said that we are talking about at least 10 ICO participants. On the same day, the TON Community Foundation offered to launch the blockchain without the participation of Telegram Open Network.


On the evening of April 1, Castel rejected Telegram's request to explain the possibility of distributing Gram bypassing American investors. The judge stressed that the securities were not recognized as agreements to buy altcoin or the coin itself, but the whole scheme, including the company's activities and investors' expectations of the sale of the asset on the secondary market.

Telegram has not been able to prove that it will actually prevent the resale of tokens to Americans or somehow affect the agreement on their purchase. Castel added that the TON blockchain gives anonymity to its members, so it will be impossible to trace whether they are U.S. residents.

An anonymous investor TON told RBC-Kryp crypt that Telegram is unlikely to issue a Gram token in defiance of the injunction. Sources of The Bell reported that Telegram is considering an option in which it will return the money only to ICO participants from the United States, and for all others will present cryptocurrency. However, there was no official position of the project management on this position.

On April 30, Pavel Durov said in a letter to investors that TON would not be able to distribute tokens on time because of the injunction. ICO participants were offered two alternatives: Telegram can return 72% of the initial investment to investors now or 110% on April 30, 2021.

In an interview with RBC-Kryplov, Sergey Solonin, the founder of the company, called the Telegram blockchain project a failure. Solonin stressed that according to the plan the TON team did not succeed, but the chances of launching the platform in the next year without American investors remain quite high.


In May, Telegram explainedthat the proposal of the project team to return 110% of the funds to investors who agree to leave them in the blockchain project for another year is not valid for U.S. residents. They can only return 72% of the investment without waiting for the situation around the platform to develop further. The company also changed the offer for non-U.S. investors, they lost the opportunity to receive payment in tokens of their blockchain or in some other cryptocurrency.

On May 7, an alternative version of the main Telegram Open Network called Free TON was launched. The launch was organized by independent developers, large validators and other participants. More than 170 companies and individuals signed the launch declaration. Instead of Gram, the project will present free TON Crystal tokens, their total emission will be 5 billion.

On May 12, Durov announced that he had stopped working on the Telegram Open Network blockchain platform. The main reason the businessman called the "paradoxical" decision of the American court. The creator of the messenger stressed that his team is not related to other projects that use them Telegram or TON for promotion. Durov urged not to trust personal data and money to such projects, although they can use the original technology of the platform.

On May 25, Telegram withdrew an appeal against a court ruling banning the distribution of Gram tokens. The decision was supported by both parties, the recall was carried out using a standard form under rule 42.1 - "leaving without consideration."


On June 18, Durov announced the lifting of the ban on Telegram messenger in Russia. The creator of the messenger called the actions of the Russian authorities in the it industry a good signal for entrepreneurs and investors. The head of the company stressed that there are no changes in terms of the safety of personal data - the right to confidentiality and confidentiality of personal correspondence is preserved.

Also in June, the SEC fined Telegram $18.5 million, demanded to return more than $1.22 billion to ICO investors, and to inform the regulator if it planned to release any blockchain-based cryptocurrency over the next three years.

On June 25, the creator of the messenger notedthat the company has already returned more than $1.2 billion directly or in the form of loans to ICO TON investors. Durov expressed hope that in the future the regulation of the blockchain industry in the United States will become more favorable.


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