A couple of years in the past, messaging app Telegram introduced it was making a blockchain referred to as the Telegram Open Community (TON). It might have its personal coin referred to as Gram. You had been going to give you the chance purchase and promote issues on Telegram utilizing Gram. It might be as thrilling as shopping for and promoting issues on Fb with Libra, if that was a factor. It’s not. The U.S. Securities and Alternate Fee mentioned it may rival the greenback in commerce and the Federal Reserve, no fan of cryptocurrencies besides their very own central financial institution digital greenback, put the kibosh on Fb’s digital foreign money wing, generally known as the Diem Affiliation.
Issues collapse.
Not so for Telegram, it appears. Telegram has what Fb needed.
After the SEC killed Gram, Toncoin took its place as a brand new possibility, an alternative choice to Gram, which was extra like an funding in Telegram itself. Toncoin is completely different, and isn’t an funding in Telegram. The 2 are separate authorized entities in accordance with Telegram press workplace – a truth challenged by many Gram traders. However Toncoin, like Gram earlier than it, is the native cryptocurrency of the messaging app Telegram.
In January 2022, there have been round 200 thousand energetic wallets holding Toncoins. As of the tip of Might, that quantity is approaching 600 thousand.
The TON Blockchain is without doubt one of the most worthwhile tech tasks ever created by Russian-backed capital and mind energy. Pavel Durov is the star of the present, being hailed as a saint for staring down the Russian intelligence equipment recognized by its acronym FSB earlier than going into self-exile.
Durov got here up with the thought – although maybe not on his personal — to do an preliminary coin providing in 2018 to create Telegram’s personal digital commerce platform on the messaging app, one of many world’s largest after WhatsApp and WeChat.
Telegram raised $1.7 billion from 171 traders, together with Russian billionaires Roman Abramovich and Yuri Milner; Qiwi founder Sergei Solonin; Russian businessman Stated Gutseriev; European dairy large Wimm-Invoice-Dann’s co-founder David Yakobashvili and others, to develop the challenge – primarily a Telegram run e-commerce ecosystem powered by Gram cash because the foreign money of selection.
Gram was blocked by the SEC, and Telegram needed to return cash to traders.
On June 26, 2020, the court docket accredited a settlement settlement between the SEC and Telegram Group Inc. and its subsidiary, TON Issuer Inc. to settle allegations that Telegram’s unregistered digital token (Gram) violated U.S. federal securities legal guidelines. The defendants agreed to return $1.2 billion to traders and pay an $18.5 million fine.
Telegram provided to refund traders into the Telegram Open Community in 2018 both by receiving 72% of their funding instantly or mortgage it to Telegram for a 12 months, then be paid in money, Gram or one other crypto, with a further 10% bonus.
Round 70% of that was returned. The remainder was not. Institutional traders misplaced their capital together with Russian traders Zotobi Management Limited (Igor Chuprin) – $280,000 loss — and Da Vinci Capital – a $20 million loss, primarily based on reporting by Forbes Russia.
For U.S. traders, they had to take the 72% refund and exit the Gram token challenge, whereas non-U.S. traders had opportunity to receive 110% of invested sum. This appears to be a Telegram choice, not an SEC one. and
From the place these traders sit, the Gram challenge has morphed into the TON (now abbreviated as “The Open Community”) challenge, and they’re questioning why they may not have simply been paid from these proceeds as a substitute of being compelled to lock in a loss. Toncoin‘s totally diluted market cap is round $5 billion, although this capital was raised by particular person crypto traders, together with retail traders.
In accordance with some Telegram traders who wished to stay nameless because of an ongoing authorized struggle with the corporate, the primary structure of the TON Community was created with cash that was collected from traders in Gram. Buyers who are actually suing Telegram say that they in the end financed the Toncoin however acquired no return on that funding. That is the crux of the story.
“The builders of the Toncoin have dangers of receiving claims from former traders of the Telegram blockchain platform,” says Slava Semenchuk, a well known Russian enterprise capitalist and cryptocurrency challenge investor told Forbes Russia. “Buyers didn’t obtain all their a reimbursement. Nothing has modified in TON, not even the code,” he was quoted as saying.
However the TON Community is a separate authorized entity, Telegram’s press workplace mentioned. TON is unrelated, as Durov has mentioned on his social media. Even the phrase “Telegram” has been eliminated. Some traders discover that suspicous.
On Might 12, 2020, Durov announced the termination of the TON challenge. On December 23, 2021, he solely expressed his support for Toncoin on his English-language channel on the messaging app.
Toncoin was at all times supposed for most of the people, whereas Gram was just for a sure circle of accredited traders.
Nonetheless, Toncoin is an funding as a lot as any cryptocurrency is.
In Russia, well-known rapper Morgenshtern announced in January that he was shopping for Toncoin. Like Elon Musk saying he was shopping for Dogecoin, the worth of Toncoin rose by 20% after the rapper touted his crypto commerce. Across the identical time, Morgenstern opened a information channel in Telegram, which was actively marketed within the messaging app and amassed an viewers of 1.3 million in just a few weeks, an ode to Telegram’s reputation and Toncoin as an funding for retail crypto bros.
“Sooner or later, the Telegram neighborhood introduced that the TON Community was not a check community, however was a working one, and renamed the check Grams to Toncoin,” Forbes Russia reported final 12 months.
Those that weren’t made entire from the canceled ICO, are suing to receives a commission from the TON Community, a community they declare they invested in within the first place.
“These traders didn’t get the chance to change Grams for Toncoins,” mentioned one consultant from the investor group who wished to be nameless. “Such transactions of Gram for Toncoin, and never merely at a challenge testing degree, would appeal to the eye of the SEC and put an finish to on the entire Gram rip-off if Gram is now Toncoin.”
Out of 5 billion Toncoins, 4.9 billion, or 99% of the amount of all cash, is concentrated within the fingers of an unknown group of whales. Many of the cash are held in about 100 wallets of unknown whales, a standard investor euphemism to explain main shareholders.
Telegram announced the official launch of crypto funds on the messaging app in Might, and the one cryptocurrency for transacting on the app is Toncoin, regardless of being completely different cash. It appears clear that the TON Community and Telegram have some managerial and investor connections, if not authorized ties.
Plans to make Toncoin the official Telegram coin had been introduced shortly after the TON Basis introduced on former Durov colleague Andrew Rogozov, a pal from again within the VKontakte days – Russia’s largest social media platform.
“Fb was unable to launch its Libra foreign money, however Pavel and Telegram succeeded,” mentioned one of many folks concerned within the swimsuit who didn’t need to be named for the document. “It turned out that each one that was wanted was to rename Gram to Toncoin and make just a few statements that Telegram had nothing to do with it. However the information say in any other case – no different cryptocurrency has acquired the chance to combine into Telegram like Toncoin.”
Telegram didn’t affirm nor deny that some traders weren’t made entire. They mentioned the corporate “totally carried out its contractual obligations beneath the Buy Agreements with all its traders in 2020. As well as, many traders loved our goodwill provide to obtain 110% of their preliminary funding in 2021. All the world-famous TON traders we spoke with understood the character of the roadblock we confronted and had been appreciative of the best way we dealt with it.”
Did Telegram violate its settlement settlement with the SEC? That settlement requires Telegram to return funds to traders, imposed a major penalty, and requires Telegram to offer discover of future digital choices. Toncoin suits the invoice. That’s what the aggrieved investors are saying in going after one of many world’s hottest tech founders, and arguably the go-to various to WhatsApp. This comes at a time when crypto is taking a beating, and testing investor persistence.
Telegram does face the authorized dangers of re-prosecution by the SEC with much more severe authorized penalties for each Telegram and its traders. It additionally places retail Toncoin holders in danger as a result of new claims from the SEC will set off a gross sales wave that may push the token value deeper into the avalanche all cryptos discover themselves blanketed in in the mean time.