A letter from a spokesperson for Telegram regarding the SEC’s emergency action to halt the sale of GRAM tokens to US investors has been making the rounds in the crypto media and on forums.
In the the letter, “Shyam” states that Telegram, maker of a popular messaging app of the same name, tried for 18 months to communicate with with the SEC regarding the TON blockchain, construction of which was to be funded by the sale of GRAM tokens.
“We were surprised and disappointed that the SEC decided to sue in these circumstances, and we do not agree with the legal position of the SEC,” Shyam writes.
In January 2018, as much of the air started to leave the ICO (initial coin offering) bubble, Telegram conducted a late-stage ICO raise and collected about $1.7 billion USD from investors around the world, including 39 accredited investors/ VCs in the US.
Russian businessperson Pavel Durov created Telegram and TON with his brother, Nikolai, a mathematician. Pavel Durov reportedly lives in exile after losing control of the Russian Facebook-style site he created when it ran afoul of Russian authorities and was acquired under pressure.
For “state security reasons,” Russian authorities have also been trying to prohibit Telegram messaging in the country because the app purportedly allows anonymous messaging.
Telegram and its proposed TON blockchain project benefited both from the ICO investing frenzy that preceded and from Telegram’s perceived street cred. GRAM tokens sold quickly.
But the SEC came down very hard last Friday on the project, claiming that VCs planned to dump GRAM tokens on retail and flout laws designed to protect retail investors:
“Our emergency measures are aimed at preventing Telegram from flooding the US market with digital tokens sold, in our opinion, illegally. We claim that the defendant did not provide investors with information on the Gram and Telegram business transactions, financial condition, risk factors and management, which is required by law.”
In the letter to investors, Shyam says Telegram is evaluating TON and GRAM and may postpone the launch of the TON blockchain, which the company had promised would be ready by October 31st or a refund available to investors.
Here it the text of the letter in full, pasted from the Russian forum:
“For our investors,
as you probably saw, on October 11, the US Securities and Exchange Commission (SEC) filed a lawsuit against the Telegram Group Inc. in the US federal court. and TON Issuer Inc., in an attempt to prevent the launch of the TON blockchain. In accordance with SEC’s stated desire to interact with developers of digital asset technologies, Telegram over the past 18 months has tried to interact with SEC and receive feedback on the TON blockchain. We were surprised and disappointed that the SEC decided to sue in these circumstances, and we do not agree with the legal position of the SEC.
Together with our consultants, we continue to evaluate the best ways to resolve the situation in the interests of the parties involved, including, but not limited to, evaluating whether it is worth trying to postpone the launch date. We are working hard to quickly resolve these issues, and hope to provide further updates over the next week.