Source: Pixabay

In Brief:

  • Telegram has agreed to hand over all financial documents requested by the SEC and additional information about its 2018 ICO before May 20
  • The required documents include information on the agreements offered with the investors in the Telegram Open Network (TON), banking information as well as information about all the offers made as part of the sale of Gram tokens.
  • While the launch of the original TON was blocked by the SEC, TON developers launched their own blockchain called Free TON.

Telegram is currently in legal hot water for its blockchain project. The encrypted messaging firm filed an order of consent, therefore agreeing to disclose documentation as requested by the United States Securities and Exchange Commission (SEC)

The documents requested by the SEC revolves around the distribution of gram tokens and purchase agreements the firm did in its 2018 ICO for which it raised over $1.7 bn. 

It will hand over the requested documents by May 20, the firm said. The documentation will include bank records and all information pertaining to “any assets disbursed to Initial Purchasers under the Purchase Agreements and assets received from Initial Purchasers in connection with the termination of the Purchase Agreements.” In addition, it will also respond to questions specifically concerning financial statements it has already handed over. 

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Courts have already blocked Telegram from launching its blockchain with the concern that the ICO was for unregulated security. The New York District Judge P. Kevin Castel issued a preliminary injunction earlier this year, which prohibited the firm from launching TON. 

This move resulted in Telegram offering to pay back US investors 72% of their initial investment, therefore reducing any American involvement in the project.

For international investors, Telegram proposed to give 110% of their investment when the network does launch – which might be April 2021 – or they could take a 72% refund now. 

Free TON community launches its own TON blockchain

Telegram’s consent comes after the news that the Free Telegram Open Network (TON) launched a version of the TON blockchain through a fork.

Based on the original Telegram Open Network, the project was developed by Nikolai Durov and the Telegram team.

The Free TON community even went as far as to declare that “the initial creator TON (Telegram/The Open Network) blockchain, can longer be involved.”

Clearly, time will tell whether Telegram would continue to fight and prove that they have a legal offering or take some action hoping not to lose market share against a competitor.