Telegram admits that it could postpone the launch of its TON blockchain network and Gram token after a late intervention from the American regulatory Securities and Exchange Commission (SEC) on Friday.
The SEC has filed an emergency action and obtained a temporary restraining order preventing TON and the Gram from launching in the United States.
Per Russian news agency Tass, which says it has obtained a copy of a letter sent to investors, Telegram says that it is considering pushing back the launch of TON and the Gram as it fights the regulatory fire.
The company had been hoping to unveil the Gram on or before October 31, with a number of cryptocurrency exchanges already poised to list the token. Telegram also says, in the letter, that it is “disappointed” with the SEC’s decision, and “does not agree” with its stance.
The letter explains,
“Telegram has been trying to interact with the SEC and receive feedback on TON for the past 18 months […] We do not agree with the position the SEC has taken.”
Investors were also told, in the same letter,
“Together with our consultants, we are looking into the best ways to resolve the situation in the interests of all parties. Possible solutions include, but are not limited to, trying to postpone the launch date. We are working hard to quickly resolve these matters. We plan to provide additional information in the weeks ahead.”
In a press release, the SEC stated that it had taken the move in order to “prevent Telegram from flooding the United States markets with digital tokens” it believes were “unlawfully sold.”
The TON Board responded by dropping off the grid, deleting all of its posts on its own Telegram channel, except for a single update on October 13, stating,
“Due to the increased level of regulatory uncertainty, we [will] take a break to analyze new information and adapt our policies.”
It has been reported that under the terms of the investment, Telegram is contractually obliged to provide tokens to its investors before this month is out, or face the possibility of returning the entire USD 1.7 billion to its 100+ investors.
In response to the SEC’s move, New York Times journalist Nathaniel Popper tweeted that Telegram backers included the likes of Benchmark, Sequoia and Lightspeed. He also added that Telegram had worked with international, New York-based law firm Skadden Arps to “get the Gram out legally.”
Telegram convinced many of its investors that they had taken the necessary steps to avoid this outcome -- but the SEC apparently disagreed.— Nathaniel Popper (@nathanielpopper)
Telegram has raised USD 1.7 billion in two private sales of the Gram – with much of the investment believed to have come from individuals and companies in the United States.
The SEC alleges that over 1 billion of the 2.9 billion Gram tokens already sold have been bought by 39 American residents. Per digital scans of documents filed with a Manhattan court, the SEC says that USD 424.5 million of the USD 1.7 billion investment has been made by America-based parties.