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TON sent investors a letter on the situation with the SEC

On October 11, 2019, The United States Securities and Exchange Commission filed an emergency lawsuit against Telegram Group Inc. and TON Issuer Inc. and a temporary restraining order has already been received.

Two days later, investors received a letter from the TON team in which they explain the situation. We quote it:

«We were surprised and disappointed that the SEC in these circumstances chose to go to court, and we do not agree with its legal position».

The letter also said that the team of Pavel Durov had been trying to establish contacts with representatives of the US Securities and Exchange Commission (SEC) for 18 months and to get clarification from their specialists about how they assess the TON project.

The letter says that now Telegram with its lawyers is analyzing ways out of this situation, including the possible postponement of the project launch date.

«We are working hard to quickly resolve this issue, and hope to provide new information within the next week».
Postponement of the launch of the blockchain and the court session.

Due to SEC claims, the launch of the TON blockchain has been postponed until at least April 30, 2020.

The date for the SEC court session against TON is set for February 18, 2020.

«Skadden, Arps, Slate, Meagher & Flom» will defend interests of Telegram Group Inc. and Ton Issuer Inc. in court.
TON wallet app published

The TON wallet application is published on the official website of the project:

You can try it only on a computer (for Windows, Mac, Linux operating systems).

Also on Github published wallet source codes for mobile platforms:

Important! The wallet runs on the TON test network. Real Grams aren't selling yet.
The latest news about the lawsuit «SEC against TON/Telegram»

The court on the SEC lawsuit against TON will be held on February 18. Telegram demands to dismiss the SEC lawsuit and pay compensation. The reason for rejecting the SEC lawsuit, according to the Telegram team, is the incompatibility of Gram tokens with the status of the securities. In addition to rejecting the lawsuit, the messenger’s specialists demand a compensation payment, which amount should be determined by the court.

Durov will be questioned on January 7 or 8, 2020, at a place «agreed upon by the parties» (presumably in Dubai). Telegram Vice President Ilya Perekopsky testified on December 16 in London. Shyam Parekh was also questioned in London (investors received letters about the launch of the Telegram blockchain platform on his behalf).

The SEC has attached to the case the private correspondence of John Hyman, who was actively involved in fundraising and maintained contact with more than ten investors. According to the documents, Hyman promised them that they will become the main sellers of tokens after the release, and preliminary trading will ensure the growth of Gram.

The names of some large investors became known from Hyman's correspondence:
— Hong Kong billionaire, former owner of the brands Tommy Hilfiger and Michael Kors Silas Chu;
— WordPress Creator Matt Mullenweg;
— Foursquare co-founder Navin Selvadurai;
— Co-founder and CEO of Yelp Site Jeremy Stoppelman;
— Former TechCrunch chief editor, Alexia Bonatsos.

At the moment, Pavel Durov refuses to share the financial statements of TON.

«At present, defendants refuse to disclose financial data regarding how they spent $ 1.7 billion raised from investors over the past two years, and also to answer questions about the distribution of these funds,» the court documents said.

On the eve of the interrogation of Durov, Telegram confirmed the development of TON in its official blog. Previously, indirect confirmations that Telegram really develops TON were only contests for blockchain developers, now we have received clear confirmation on the official messenger website.

It is absolutely certain that this publication is a necessary measure, it is a kind of public offer in order to avoid potential claims from the SEC in court.
Telegram and SEC ask court to speed up the consideration of the cryptocurrency dispute

The filing of motions indicates that both the SEC and Telegram want to avoid a full-fledged lawsuit with the debate of the parties, which can take a lot of time.

Position of Telegram:
According to Telegram, the decision to ban the release of Gram contradicts SEC statements about the desire to collaborate with developers.

On January 7-8, Pavel Durov was interrogated in Dubai. According to the transcript of the interrogation, during two days he was explaining to SEC lawyers how much money he spent on Telegram and TON, why he decided to conduct an ICO, how much he spent on equipment and why he doesn’t consider Gram as a security.

Durov’s position during the interrogation: Gram is not a security, but a digital currency. And a large number of investors were needed to finance the purchase of equipment, as well as to ensure the stability of the future blockchain platform.

Position of SEC:
SEC continues to insist that investors expected to make money on the resale of Gram even before the launch of TON, and Durov knew about the gray market. After examining the correspondence of Telegram consultant John Hyman, the SEC found that members of the TON team called Gram tokens an analogue of securities.

A third party intervened in the lawsuit. Now the US Digital Chamber of Commerce is involved in the legal dispute between Telegram and SEC. The Chamber of Digital Commerce is a non-profit organization that represents the interests of about 200 companies that develop blockchain technologies or invest in them.

The Chamber calls for clarity regarding investment contracts. The Chamber emphasized that they were not trying to prove that the sale of Gram tokens was not a securities transaction. Instead, the trade association seeks to provide sufficient clarity regarding the rules applicable to digital assets:

“Despite the fact that the Chamber has no idea whether the offer and sale of the Grams is a securities transaction, we are interested in ensuring that the legal framework applicable to the digital assets underlying the investment contract is clear and consistent.”
Transfer of court date, block validation mechanism and launch of TON Web.

First things first.

— The SEC vs. TON hearing was adjourned for one day, from February 18 to February 19. The court’s work schedule has been adjusted due to the fact that a farewell ceremony with federal judge Deborah Batts will take place on February 10 (she died on February 3).
The court, on its own initiative, brings a third party to the case: Judge Kestrel requested the opinion of the lawyers of The Commodity Futures Trading Commission (CFTC). CFTC is known for not equating bitcoin with securities - and this is in Durov’s favor.

— A document authored by Nikolai Durov has been published on, which sets out the details of the Catchain consensus in the Telegram Open Network blockchain. TON will have no more than 100 validators for the main chain and from 10 to 30 for each shardchain.

— In addition, on the site appeared instructions how to configure proxies to access TON Sites and create new TON Sites. Full instruction is available at the link. You can already start your own TON site, but the binding is done to the proxy. TON DNS is not running yet.
February 19 held a hearing on the lawsuit «SEC against TON/Telegram»

There are no significant results. The judge extended the existing restriction on the sale of tokens for an indefinite period.

According to the comments of those who attended the hearing, Telegram has been a success in proving of decentralization. But the court has doubts that the declared TON capabilities are consistent with the actual situation.

The judge promised that he would make a final decision before April 30. At the same time, this is the deadline under the agreement of TON with investors.
TON DNS documentation has published

Instructions for working with TON DNS have posted recently. In the ecosystem of the TON blockchain, DNS is needed to translate readable domain names (such as test.ton) into TON smart contract addresses, ADNL addresses, and so on.

The documentation describes:
- the principles of the formation of domain names for TON Sites,
- the procedure for resolving names when searching for a TON site,
- rules for registering new domains.
TCF Testnet is launched

TCF Testnet was created by members of the TON Community Foundation. It's an initiative group of developers who are planning to launch TON bypassing the launch prohibition for Telegram.

TCF Testnet and Telegram's testnet2 are different networks, and tokens will not be transferred between them. You can configure different wallets on different networks (instructions for switching to TCF Testnet).