Telegram Abandons TON Blockchain Project After Court Fight With SEC

TON is officially dead.

Telegram founder Pavel Durov wrote in his public channel Tuesday that the Telegram Open Network (TON) project would be discontinued due to the company’s ongoing legal fight with the U.S. Securities and Exchange Commission (SEC).

“Today is a sad day for us here at Telegram. We are announcing the discontinuation of our blockchain project. Below is a summary of what it was and why we had to abandon it,” he wrote.

An accompanying blog post said the SEC’s winning of a preliminary injunction in a U.S. court led to the decision because it barred Telegram from launching TON or distributing its gram tokens. The move is an abrupt shift for Telegram, which said less than two weeks ago it would be launching the network in April 2021.

Telegram announced at the end of April its investors could receive 72% of their funds back immediately, or 110% back in a year, once TON had launched. U.S. investors would not be able to take the latter option, Telegram said in a later update. In Tuesday’s post, Durov did not say whether all investors would be immediately refunded or how much they’d receive.

Durov referenced third-party efforts to launch independent versions of the TON blockchain, but said no Telegram employee is involved with these projects.

“While networks based on the technology we built for TON may appear, we won’t have any affiliation with them and are unlikely to ever support them in any way. So be careful, and don’t let anyone mislead you,” he wrote.

TON Labs, a startup that had been running a test network, launched its own version of the network last week, dubbed “Free TON,” after Telegram announced further delays.

Durov also took aim at the injunction barring gram distribution worldwide, noting that the judge in his case had indicated if grams are issued, a U.S. citizen might still be able to access them.

“Sadly, the U.S. judge is right about one thing: We, the people outside the U.S., can vote for our presidents and elect our parliaments, but we are still dependent on the United States when it comes to finance and technology (luckily not coffee),” he wrote.

The dollar and its influence on the global financial system give the U.S. immense power, Durov said, adding that the country can also influence Apple and Google to remove apps from their respective app stores.

“So yes, it is true that other countries do not have full sovereignty over what to allow on their territory,” he wrote.

Durov closed his post with an appeal to decentralization.

“I want to conclude this post by wishing luck to all those striving for decentralization, balance and equality in the world. You are fighting the right battle,” he wrote. “This battle may well be the most important battle of our generation. We hope that you succeed where we have failed.”