“The Gram Token Sale on Liquid has been canceled,” Liquid writes, “and all funds previously held in escrow by Liquid have been returned to Liquid users who participated in the Gram Token Sale.”
Liquid explains that the terms of its token sale promised to refund buyers if the Telegram’s TON network did not launch by November 30th, 2019.
TON (Telegram Open Network) is Telegram’s planned, multipurpose blockchain system. GRAM tokens were sold to fund its development.
Telegram is an encrypted messaging app for mobile and desktop devices. The service allows users to communicate privately.
Telegram claims to have 100 million users and initially promised to integrate payments on TON into the messaging app.
The company has since written that it will not be integrating TON and messaging- at least not initially.
The decision to separate messaging and TON may be designed to appease global regulators very concerned about Facebook’s proposed in-app crypto payments network, Libra.
Since it announced Libra last May, Facebook has been managing a lot of flack from regulators across the world concerned that a global payments network rolled out rapidly amongst Facebook’s 2.4 billion signups could have a destabilizing effect in regions with weak local currencies.
Regulators are also concerned about Facebook’s cavalier record and the possibility that Libra could be used by criminals or terrorists.
When Telegram raised $1.7 billion from 171 purchasers through a SAFT (simple agreement for future tokens) deal in January and March 2018, the company promised purchasers a partial refund if the TON blockchain did not launch by October 31st, 2019.
On October 11th, the SEC obtained emergency orders blocking the secondary of GRAM tokens in the U.S and Telegram announced thereafter that it would not meet the deadline for launch.
The SEC claims Telegram plans to “flood” the U.S. with improperly issued tokens.
GRAMs were officially sold on the basis that they are simple “utility” vehicles for accessing services on TON.
The SEC has countered that GRAMs were knowingly bought and sold as an investment vehicle.
The SEC has been demanding to see Telegram’s banking records to see whether the company’s use of funds shows they have been promoting the token.
Telegram successfully bid for a six week extension in order on providing the records in a matter that does not violate privacy laws in Europe and elsewhere. The records are now due on February 26th, and New York Judge P. Kevin Castel has ordered that, “a log stating the basis for any redaction,” shall also be submitted at that time.
Meanwhile, the SEC produced two invoices this week that appear to show Telegram paid brokers hundreds of thousands of euros and dollars to sell GRAMs for them after the official January and March sales concluded.
If the invoices are authentic, the SEC says, they add force to the regulators claims of an unlicensed sale of securities.
The invoices also, “render (the resellers) statutory underwriters (such that Telegram’s offering would not qualify for an exemption),” under Red D.
A majority of purchasers who bought GRAMs in the initial sale have reportedly reportedly granted Telegram a six month extension on launch of TON. No refunds have yet been issued there,
Liquid, apparently, did not ask for an extension. According to the blog post:
“Under the Gram Token Sale Terms of Sale, Liquid is required to return all funds committed by Liquid users in the Gram Token Sale due to the fact that the TON mainnet was not launched by 30 November 2019.”