Telegram is officially calling it quits on its crypto-focused subsidiary, Telegram Open Network (TON).
“Telegram’s active involvement with TON is over,” writes Pavel Durov, founder and CEO, in an announcement on his channel.
“For the last 2,5 years, some of our best engineers have been working on a next-generation blockchain platform called TON and a cryptocurrency we were going to name Gram. TON was designed to share the principles of decentralization pioneered by Bitcoin and Ethereum, but to be vastly superior to them in speed and scalability,” the announcement continues.
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Durov claims that technology had the potential to revolutionize how people store and transfer funds and information. He then goes on to officially state that Telegram is no longer involved in any capacity with TON.
“You may see – or may have already seen – sites using my name or the Telegram brand or the ‘TON’ abbreviation to promote their projects. Don’t trust them with your money or data.”
TON was a blockchain platform designed to offer decentralized cryptocurrency to anyone with a smartphone, in a similar fashion to Facebook’s Libra project (which has itself faced significant controversy).
Last year in October, the SEC (The US Security and Exchange Commission) ordered Telegram to halt sales of its cryptocurrency (called Gram) after it failed to register an early sale of $1.7-billion in tokens prior to the launch of the network.
“Unfortunately, a US court stopped TON from happening. How? Imagine that several people put their money together to build a gold mine – and to later split the gold that comes out of it. Then a judge comes and tells the mine builders: ‘Many people invested in the gold mine because they were looking for profits. And they didn’t want that gold for themselves, they wanted to sell it to other people. Because of this, you are not allowed to give them the gold.’”
The Verge writes that the funds were raised in a series of, what Telegram billed as, pre-ICO offerings back in 2018. Though the company ended up cancelling the much-hyped ICO due (in part) to increase SEC scrutiny.
In the announcement, Durov speaks out against the ruling arguing that American courts should not have the power to stop the sale of cryptocurrency beyond US borders. He urges others to take up the decentralization fight in Telegram’s stead.
“This battle may well be the most important battle of our generation,” he writes. “We hope that you succeed where we have failed.”
Edited by Luis Monzon
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