SEC Prohibits Telegram From Launching TON, Launch Postponed
Telegram has informed investors that the launching of the TON blockchain project will be not as per the schedule and has been postponed. They have pushed the deadline from Oct. 30 to April 30, 2020.
In an email to investors Telegram has made a mention of its recent dispute with the Securities and Exchange Commission (SEC), which obtained a restraining order that led to prohibition of the messenger app company from launching TON and issuing gram tokens. The agency has considered the grams to be unregistered securities.
The email that the investors received in the second of Telegram’s two $850 million fundraising round from early 2018, says:
“We had intended to launch the TON network in late October. However, the recent SEC lawsuit has made that timing unachievable. We disagree with the SEC’s legal position and intend to vigorously defend the lawsuit. We are proposing to extend the deadline date in order to provide additional time to resolve the SEC’s lawsuit and work with other governmental authorities in advance of the launch of the TON network.”
The extra time will be beneficial for companies working on applications for the TON network, Telegram said.
The investors who are in hold of a majority of the tokens bought in the round have the power to extend the deadline and their consent is essential to shift the same.
The two groups of investors, those who bought tokens in February 2018 and those who did so in March 2018, will need to approve the extension separately, and the possibility of one group being willing to postpone while the other not being willing to do so could be present.
“In these circumstances, we propose to make certain limited amendments to the terms of the purchase agreements that remain in place to reflect the fact that fewer Grams will be issued and in circulation on the Network Launch Date.”
Investors in the second round must sign a form that shows their official agreement to the extension before Oct. 23. If most decide on not signing, these investors can get back “approximately 77 percent” of their money.
The first-round investors were sent “a separate communication” from Telegram, according to the letter.
If the deadline is in fact prolonged, Telegram plans to spend another $80 million before April 30.
“We look forward to receiving your support to ensure we can proceed with our vision for TON,” the letter concludes.
On Oct. 11, the SEC obtained an emergency restraining order to cease the launch of TON. This was followed by the investors being informed by the company on the extension in the launching date.
A court hearing on the same has been scheduled on the 24th of October in New York.