Telegram orders US investors to sell back their TON tokens immediately

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Telegram orders US investors to sell back their TON tokens immediately

By Oliver Carding - min read
Updated 29 May 2020

US investors in TON, Telegram’s in-house cryptocurrency, have been asked to immediately accept a payout due to a breach in US securities regulation

Telegram has said that American investors in its blockchain project should move to secure their payouts with immediate effect. This is due to Telegram breaching existing financial regulations in the US and will be trying to desperately recover TON in American hands before its official launch in 2021.

No gram token or crypto payouts

The messaging platform yesterday sent a letter to investors in its Telegram Open Network (TON), saying it was withdrawing an earlier offer to make refunds available in gram tokens. The firm has also said the repayments will not be paid using any other cryptocurrency.

In another letter to American investors, the firm noted that the option to receive refunds had been narrowed down to an immediate buyback.

Telegram has missed the launch of its TON platform twice, the latest a week ago on April 30. As per its contractual obligations with non-American investors, the firm is to pay back 72% of their funds immediately, or payout 110% returns if they wait until April 2021.

In the two offers, Telegram was looking to repay investors via its gram token. However, given its tussle with the US Securities and Exchanges Commission (SEC), the firm has withdrawn the crypto option.

In the letter, Telegram views the gram or crypto option as unviable. The emails continue:

“Unfortunately, based on more recent discussions with relevant authorities and our counsel, we have made the difficult decision not to pursue an option involving grams or another cryptocurrency due to its uncertain reception from the relevant regulators.”

Telegram to US investors: accept the payout now

While Telegram is offering non-American investors the option to wait a year for TON or get a 110% refund, this has bot been offered to US investors.

According to the Russian news platform RBC, the letter sent to American investors tells them that their only option is to accept the 72% refund immediately.

The platform cites the U.S. Securities Act of 1933, stating that its offer now accommodates non-US customers only. Customers now have until Tuesday, May 5, 2020, 5:00 pm UK time, to state whether they are American or non-American investors.

Investors have been urged to respond to the email as soon as possible because Telegram plans to have them “return signed documents” related to the payouts by Monday, May 11, 2020.

Telegram has run into several pitfalls as it seeks to launch its blockchain platform. The case against the firm is that its gram tokens sale contravened the U.S. securities laws.

In 2018, Telegram recorded what was then the biggest initial coin offering (ICO), raising $1.7 billion for its TON project. The token sale was then dwarfed by EOS’ $4 billion ICO that concluded in June 2018.

The firm hopes to launch TON by 2021, hopefully after concluding its case with the SEC.

Investors can still leave their holdings with the firm as a “loan” and earn the 110% repayment in a year.