Pavel Durov, co-founder of Telegram, announced in his Telegram-channel that the company has reached an amicable settlement with the U.S. Securities and Exchange Commission (SEC) in a dispute over the block project TON (Telegram Open Network).
“Unfortunately, we were unable to launch the TON platform as scheduled due to a preliminary injunction from the U.S. court, and were forced to return the remaining funds to customers in accordance with our agreements. Since it does not seem appropriate to continue the proceedings in court, we are happy to be able to stop the trial without denial or admission of guilt,” wrote Pavel Durov.
The U.S. court ordered the return of $1.22 billion in Gram crypt currency to the buyers as well as $18.5 million in compensation. This was stated in a letter from the SEC to Judge Kevin Castel, who handled the case. Pavel Durov said in his appeal that by now the company has already paid out more than $1.2 billion to investors, both directly and in the form of loan agreements.
The SEC and Telegram reached an amicable agreement on June 11. According to him, the messenger has 30 days to pay the fine, and he can return the money to investors within the next four years. In addition, Telegram has pledged to give three years’ notice of intent to issue crypt currency, digital coins, tokens or any other digital asset. However, consent is not required, but only to be informed. In case of misrepresentation, the SEC may impose an additional fine on the company.
In early 2018, Pavel Durov reported on plans to hold an ICO of his block-platform TON and release the cryptovalyte Gram. After integration with Telegram, the TON platform was to become a revolutionary solution for information storage and transfer. His team promised that the blockchain would process millions of transactions per second and would therefore be able to compete with the largest payment systems Visa and Mastercard.
At the same time, it became known that the Durova brothers sold 2.9 billion coins and attracted $1.7 billion. The project has more than 170 investors, including 39 US residents. Qiwi founder Sergey Solonin and Wimm-Bill-Dann founder David Yakobashvili were known to be among the buyers.
In October 2019, SEC filed a lawsuit against Telegram Group and TON Issuer and suspended ICO. The U.S. regulator turned out to be dissatisfied with the fact that the companies’ financial information was not disclosed as required by the U.S. securities laws. Durov decided to postpone the launch of the platform until April 30, 2020 and invited investors to wait while they deal with the SEC. In March, a U.S. court banned the release of cryptographic currency. In May 2020, Pavel Durov said in his Telegram-channel that he was closing the block project TON.
Now the Telegram team is continuing to develop other innovative directions and hopes that in the future the regulation of block-chain technologies in the U.S. will become more favorable for market participants, Pavel Durov wrote.