On May 12, 2020, messaging service Telegram announced that it is abandoning its blockchain platform Telegram Open Network (TON) after a lengthy legal battle with the US Securities and Exchange Commission (SEC).
Pavel Durov, the founder and CEO of Telegram, revealed via a blog post on his channel that his company was officially discontinuing their blockchain project.
The announcement comes as a shock, as just last month Telegram, a messaging service used by more than 400 million users, had guaranteed investors and followers of the project that it would launch TON by April 2021.
Telegram then went on to offer investors a refund of $1.2 billion, a substantial share of their investment, after the supposed launch of the TON network.
Durov disclosed in his post that the US court had ruled that Grams could not be distributed even outside of the United States, as US citizens would have found a way around legislation to access the TON platform.
As we had recently reported, a US District Judge in Manhattan had issued a preliminary injunction on March 26 in favor of the lawsuit by the SEC to block the launch of TON platform.
The US financial watchdog has long viewed the sale of 2.9 billion gram tokens at discounted prices in 2018 as a threat to the dominance of the US dollar.
Fighting for the Principles of Decentralization
Telegram initially came up with the notion of TON blockchain and its crypto in 2017, and the project quickly gained traction as Benchmark and Lightspeed Capital along with other investors put up $1.7 billion to build the network.
The TON blockchain was intended to personify the principles of decentralization pioneered by BTC and ETH, but would essentially have higher speeds and improved scalability than its predecessors when incorporated into Telegram, creating an open, decentralized exchange of value and concepts.
The blockchain venture comes to a bitter end, with Durov wishing luck to all enterprises endeavoring for decentralization and balance in the industry.
He viewed this fight as perhaps the most important battle of our generation and hoped that other entrepreneurs would succeed where Telegram had failed.
“We are leaving it to the next generation of entrepreneurs and developers to pick up the banner and learn from our mistakes.”
TON Community Marches On
Despite today’s news of the official end of the TON crypto project, a Free TON Blockchain and tokens were launched on May 7, 2020 by the decentralized community.
During the much-publicized launch, the TON community claimed that Telegram can no longer be involved in the project given the regulatory hurdles it has faced from the SEC.
The TON community had previously declared that it would release the network, despite Telegram’s long-running legal dispute with the SEC.
By launching both the network and tokens independently from Telegram, the Free TON community positions the network as a provably decentralized blockchain, perhaps living up to Pavel Durov’s vision of decentralization and freedom in the crypto space.