Telegram has thrown in the towel in its judicial battle against the U.S. Securities and Exchange Commission (SEC) and will no longer fight to lift the ban imposed on its blockchain token project.
The case is closed ... for now!
In a May 22 report, the provider of the well-known messaging app said it withdrew its appeal request for a previous court decision that had supported the SEC to ban the issue of "gram" tokens to Investors both inside and outside the United States.
The new document filed with the United States Court of Appeals for the Second Circuit states: "The parties in the case mentioned above have filed a clause that withdraws this appeal under local rule 42.1".
The rule provides that the parties present an agreement to dismiss the case without prejudice. As such, the case is over for now, but not necessarily forever. Telegram raised $ 1,7 billion in a private token sale in early 2018 to develop a blockchain called the Telegram Open Network or TON.
The plan was blocked by the SEC for violating the U.S. securities law in October, several weeks before its scheduled launch. After six months of discussions and accusations from both sides and a hearing in the New York southern district court, Judge Kevin Castel supported the initial preliminary injunction that forbade Telegram to issue tokens to investors on March 24. Telegram immediately moved to appeal, but that effort died with the filing requested on May 22nd.
On May 12, Telegram CEO Pavel Durov announced in a post that Telegram would no longer develop TON. That post marked Durov's first public statement on the project, which was largely developed in secret.
Two options have now been offered to Gram investors: take back 72% of their investment in TON, based on the previously agreed contract modification; or to lend the money to Telegram for a year, with the promise of getting 110% in April 2021.
US investors were given only the first option. Some investors said they had already received the repayments, while others said they had taken the road to granting the loan.
However, part of the investors said they were dissatisfied with the result and announced that they are considering filing a lawsuit against Telegram. So far, no lawsuit has been made public.
However, the TON project may not be completely dead. Earlier this month, a group of professional validators launched an updated version of the blockchain, called Free TON, with the technical support of TON Labs, a startup that previously helped Telegram with the project.