Telegram Founders Refuse to Report to SEC on How They Spent $1.7B Raised in ICO

| Updated
by Jeff Fawkes · 3 min read
Telegram Founders Refuse to Report to SEC on How They Spent $1.7B Raised in ICO
Photo: Shutterstock

During the SEC investigation into the Telegram’s TON blockchain, Durov brothers rejected an order to disclose ICO-related banking transactions.

On Thursday, TON founders received an order to open their TON ICO documents to the investigators. The order came via a court filing by the U.S. regulator. Per the document:

“Plaintiff respectfully moves to compel Defendants to answer questions and provide documents regarding the amounts, sources, and use of funds raised from investors in connection with the unregistered sale of securities at issue in this case.

The requested bank records are highly relevant to the issues in dispute in this case, including how much money Telegram has spent, and in what manner, in developing the TON Blockchain, the Telegram Messenger application to be integrated with the TON Blockchain, and related applications.”

The orders should give regulators a list of spendings made by the team during the last 2 years, but Durovs refuse to give out such information.

The SEC is citing securities law as a cover for yet another ICO check. It has gathered $1.7 billion, which is somewhat a big sum even for a successful software development company. However, it is not as easy to crack the Durov brothers as someone may think:

“Defendants are now refusing to disclose the bank records concerning how they have spent the $1.7 billion they raised from investors in the past two years and to answer questions about the disposition of investor funds”

The SEC Doesn’t Like Serious ICO Projects

Roughly a month before the official launch of the Telegram‘s TON network (for fast and secure payments), the SEC attacks project development. The Durovs didn’t expect such a move.

In October 2019, TON developers were almost ready to launch the mainnet. Instead, they issued a statement saying that the negotiations with America’s SEC are in a dead-end and the coin’s launch is postponed. However, the conversations between the SEC officials and Durov brothers were in place for at least 1,5 years, so this issue didn’t just come out of the blue.

Why the SEC suddenly started claiming that GRAM tokens are securities? During the ICO, Telegram founders made precautions and restricted the U.S. citizens from participating in the event. But a bunch of American investors found a way to buy tokens via third parties. Now, the SEC thinks it’s their jurisdiction, so it ordered to stop the TON’s launch. The list of demands is growing, that’s why it appeared that GRAM is ‘security’. Looks like the only way to launch TON is to comply with the U.S.

The SEC Will ‘Investigate’ Dollar Competitors

Pavel and Nikolai have developed one project on the roots of another. This is what Zuckerberg was trying to do with Libra by setting the construction yard right near Facebook‘s corporate circle of influence.

However, when the SEC see some ICO project that has a very big base of loyal customers, it starts checking everything with double speed. Strange, how hundreds and thousands of the scammy ICO projects went here and there and then to Oblivion on the SEC’s eyes… and nobody wanted to act.

Meanwhile, when it comes to some ICO model that is not obviously stupid, scammy or led by the corrupt government officials, the SEC immediately spots some ‘dangers’. Will the SEC find a way to discourage developers and investors of TON from creating the competitor able to hit the dollar’s hegemony?

Altcoin News, Blockchain News, Cryptocurrency News, Mobile, News
Jeff Fawkes
Author Jeff Fawkes

Jeff Fawkes is a seasoned investment professional and a crypto analyst. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.

Related Articles