Earlier this month, Telegram Inc. announced that it was abandoning its development of the Telegram Open Network (TON). The move comes after the SEC won a preliminary injunction against Telegram in the Southern District of New York in March that blocked Telegram from launching TON and its native cryptocurrency, the Gram. The Court determined that the SEC had shown that there was a substantial likelihood it could prove that Telegram's plan to distribute Grams into a secondary market constituted an unregistered securities offering. In a blog post accompanying the announcement, Pavel Durov, the founder of Telegram, acknowledged that the Court's decision was the reason for TON's shutdown. Durov expressed frustration that a U.S. court could prevent a foreign based project from commencing, stating, "The U.S. can use its control over the dollar and the global financial system to shut down any bank or bank account in the world." For more on the Court's decision, please read our alert.
Originally published 22 May 2020
This article is presented for informational purposes only and is not intended to constitute legal advice.
