Telegram shutters its cryptocurrency project: Here's why
Telegram, one of the biggest messaging platforms in the world, has decided to shutter its blockchain and cryptocurrency project - the Telegram Open Network (TON). The idea behind TON was similar to that of Facebook's Libra, but a lengthy battle with a US court made it difficult for the Russian company to keep it operational. Here are more details.
Created two and a half years ago, TON offered a decentralized cryptocurrency called Gram for peer-to-peer exchange and payments via smartphones. "The [blockchain] technology we created allowed for an open, free, decentralized exchange of value and ideas...TON had the potential to revolutionize how people store and transfer funds and information," Pavel Durov, the founder and CEO of Telegram, wrote on his channel.
Despite the potential, Durov, who self-exiled from Moscow, said, a US court stopped TON from happening. Here, he referred to the order from New York's Southern District Court that declared a ban on the project, saying that neither Gram could be distributed in the US nor TON access could be allowed to citizens of the country in other parts of the world.
Given that keeping Americans completely out of TON cryptocurrency transactions was next to impossible and risked creating legal troubles, Durov decided to abandon the project. "If the US suddenly decided to ban coffee and demanded coffee shops in Italy be closed because some American might come there - we doubt anyone would agree," he said while explaining his case.
Along with the court order, the US Securities and Exchange Commission (SEC) had also ordered Telegram to stop the sale, delivery, and distribution of Gram after it failed to register an early sale of $1.7 billion worth of its crypto tokens and was found in violation of federal security laws. That made it even more difficult for the Telegram subsidiary to survive.
"Telegram's active involvement with TON is over," Durov said, adding that "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."