Investors in Telegram’s Terminated TON Project Contemplating Lawsuits Against the Firm
Telegram CEO, Pavel Durov, announced this week that the TON project had been terminated; now, investors who participated in the company’s $1.7 billion ICO are in the process of suing the company
Investors in Telegram’s TON project, who stumped up a massive $1.7 billion for the blockchain platform’s development, are now contemplating a lawsuit, CoinDesk reports.
According to the publication, the investors’ anger isn’t just the sudden decision to shut down TON, but the options Telegram had given them before the unfortunate turn of events.
Before Telegram, CEO Pavel Durov surprised many by announcing an end to the project; the company had told investors to choose one of two offers: a 72% immediate payout, or to loan their investment to the firm and recoup 110% in 2021.
American investors were advised to accept the payout, especially after the US Securities and Exchanges Commission (SEC) began legal action.
In a court battle that had seen the regulator accuse Telegram of offering unregistered security through its Gram token, SEC emerged as the victor. This is after a US court had barred Telegram from launching TON and distributing the tokens “anywhere in the world.” The Telegram chief said it was the US court’s verdict that had “stopped TON from happening“.
One of the investors told CoinDesk that “[they] were considering filing a lawsuit” because Telegram’s splash of over $405 million on the TON project “got investors nothing.”
According to Vladimir Smerkis, at least half of those who invested in the project are likely to bring lawsuits against the company.
“… people are unhappy and are planning to get their money back and later sue…” he added.
Some investors reportedly pledged to stay with Telegram CEO Pavel Durov “until the end.” However, the end they envisioned wasn’t one that Durov announced when he called it quits.
The publication also quotes three other unnamed individuals as saying investors were actively pursuing litigation against Telegram. One of these individuals clearly indicated that US, Europe, and Russia based TON investors would be pursuing legal avenues for compensation.
A representative of an Eastern Europe venture fund suggested the lawsuits would be because the 72% payout did not make sense to many investors, who had waited two years for returns.
“It’s better to lose the money altogether,” the individual reportedly said.
A US fund manager has corroborated the fact that several US-based TON investors were ready to sue Telegram.
Whether they win or not is a matter for the courts to decide, but the fund manager maintains American investors in Telegram’s TON “will sue“.
Telegram’s woes come as Facebook’s Libra, another ambitious crypto project, has slowed down as regulators around the world express their concerns.