The cloud-based instant messaging app, Telegram is pushing the breaks on its blockchain and crypto endeavors by postponing the launch of its Telegram Open Network (TON) in light of some legal issues with the United States Securities and Exchange Commission (SEC).
Telegram has been prepping to enter the blockchain and crypto space for some time now, though observing almost complete radio silence after successfully raising $1.7 billion last year in the token offering. Telegram’s official website revealed last week that the app will be integrating a wallet for TON’s native gram tokens into the company’s flagship messaging app.
Soon after the first public acknowledgment of Telegram’s link to TON, the company had to announce the unfortunate push back on the launch date to its investors. Yesterday the messaging platform revealed that the TON release, which was initially scheduled to be later this month, is now be postponed to late April next year.
Although we disagree with the SEC’s legal stance against the token offering, the recent lawsuit has made us reconsider our timeline for launch. And while we continue to defend our viewpoint aggressively, we are proposing to extend the deadline to next year, April, giving us more time to resolve issues and get back on track with the TON launch
The SEC, which has declared the company’s $1.7 billion dollar token offering to be illegal; halted the launch of the eagerly awaited multi-million dollar project claiming that Telegram has broken the law. The app reportedly did not seek the approval of regulators before selling their offering to the public.
But the messaging app didn’t essentially “break” any law because back in 2018 Telegram filed a Form-D application, according to which the company had the permission to sell a security without the approval of regulators; provided the offering only involves limited investors.
Unfortunately for Telegram, its investors were at liberty to resell their assets, which the SEC considered as a violation of the Form-D exemption. Hence the commission’s complaint accuses Telegram and TON of bypassing the law in the Gram token sale, maintaining that neither of the involved parties registered with the SEC.
Telegram reached out to its investors through a letter on Wednesday, calling for their support as moving the deadline requires the approval of investors from both the offering rounds.
If one group gives their approval and the other doesn’t, Telegram will need to make certain amendments to the purchase agreements to mention that fewer Grams will be issued. The company is asking investors to make their decision regarding the deadline extension before Oct. 23.