Gram was banned. What will happen to the cryptocurrency of Pavel Durov now

The US court has banned the TON project from distributing its tokens, but the proceedings are ongoing. What does this mean for the future of the blockchain platform and will it be launched, for which …

The US court has banned the TON project from distributing its tokens, but the proceedings are ongoing. What does this mean for the future of the blockchain platform and will it be launched, for which $ 1.7 billion was raised during the ICO

On the evening of April 1, Federal Judge for the Southern District of New York, Kevin Kastel , rejected Telegram's request to clarify the possibility of distributing Gram tokens bypassing American investors. Simply put, the court has once again confirmed its ban on the release of a new cryptocurrency. Kastel emphasized that not the agreements for the purchase of the altcoin or the coin itself, but the whole scheme, including the company's activities and investors' expectations from the sale of the asset in the secondary market, were recognized as the security.

According to the judge, Telegram has failed to prove that it will actually prevent the resale of tokens to Americans or somehow affect the agreement for their purchase. Kastel added that the TON blockchain confers anonymity on its members, so it will be impossible to track whether they are US residents. So the court responded to the company's proposal to provide precautions to prevent the resale of Gram by non-US investors to ICO participants from the United States.

Minimum chances and maximum problems

The case continues, but from the position of the judge it is clear that Pavel Durov's company has practically no chance to win in the process, says Alexander Zhuravlev, managing partner of the EBR law company. He suggested that, most likely, the founder of Telegram will be forced to return the invested funds to investors.

“The court actually closed the entry of Telegram to other markets outside the United States, and previously invested investors will not legally be able to resell their tokens. Of course, there will still be an appeal, but we can already say that the project's maneuvers are very limited, ”Zhuravlev said.

The lawyer added that the United States has agreements with other countries on the mutual execution of judicial acts, and "not a single normal investor" with such a ban will buy tokens, since their legal turnover will be as difficult as possible. According to an informal agreement, many regulators from different countries are likely to follow a similar path at the expense of the capabilities and influence of the United States on the world economy, the specialist emphasized.

In early March, it became known that among the investors in Pavel Durov's cryptocurrency were several Russian businessmen, including the structures of Roman Abramovich, former minister Mikhail Abyzov and businessman Mikhail Gutseriev. At the same time, information appeared that the aggregator of Gett taxi, KupiBilet air tickets and the largest Ukrainian bank Privatbank were planning to use the TON system in their work.

Oranges, phones and tokens

Yuri Brisov, a member of the Commission on Legal Support of the Digital Economy of the Moscow Branch of the Russian Lawyers' Association, explained that the fundraising for the TON project was not carried out ideally, so now the assets are limited. Brisov called the opinion that the court recognized the Gram tokens as a security as a big mistake; in fact, it is about the method of offering.

“In the Howey case, about which the court writes, the subject of the offer of securities were plots of land and orange trees. In another case, Edwards, it was about telephones, and in another case, Silver Hills Country Club, it was a country club membership. It is obvious to everyone that neither oranges, nor telephones, nor club cards are securities per se, "the expert explained.

Even if Telegram loses this case, it will have to return the money to investors, pay fines, but the tokens themselves will not be recognized as illegal, the specialist emphasized. He added that the decision in favor of the SEC would be a blow to the project, set the launch back a few steps, but even in the worst case, Gram would be able to get into circulation as a cryptocurrency.

The launch of the TON blockchain project was supposed to take place before the end of October last year. However, a few days before that, the SEC demanded a ban on the issue of tokens and achieved the suspension of the ICO, within which $ 1.7 billion was raised.After that, the Telegram team suggested that investors postpone the deadline until April 30, 2020.

Then the company conducted a survey among ICO participants, and the majority agreed to set a new date. In October, Pavel Durov offered investors to return 77% of the invested funds or sign an extension for the project launch date. From October to April, Durov promised to spend another 5% of funds on the development of the project, so if it is not launched on October 30, the expected return will be 72%, Yakov Barinsky, head of the crypto investment bank Hash CIB, said earlier.

At the same time, sources for the Kommersant newspaper reported that the first vote to approve the postponement was non-transparent, and now many "are inclined to take the funds." The interlocutors of the publication, among whom were TON investors, stressed that Telegram is unlikely to be able to win the court, therefore it will be forced to return the funds.

Disadvantages and advantages of the Telegram Open Network project

Petr Lyalin, deputy director for legal issues and technologies at Synergy Research Group, lecturer at Moscow Digital School, suggested that the TON project would be terminated in its current form and would not be restarted in the near future. Lyalin believes that in the long term, subject to a significant reformat of the project, changes in its legal documentation and agreements with investors, TON could potentially be relaunched. For this, it is also necessary to obtain approval from the US judicial authorities to remove restrictions on its implementation, the expert emphasized.

“However, the prospect of restarting the project seems difficult and there is a possibility that Telegram will be obliged to return the previously attracted funds,” concluded Lyalin.

Mikhail Uspensky, partner of the Taxology law firm, looks more positively on the future of Pavel Durov's blockchain project. He is sure that it is too early to bury TON: the project has a "well-developed" legal structure and "respectable" New York lawyers. On the other hand, Ouspensky noted that the procedural proceedings in the United States can last for years, and a project “tortured” by the courts, even as a result of a win, may cease to be relevant for investors and creators, and it may become technologically obsolete.

Most experts believe that Telegram will have to return the funds raised to investors in the near future. The trial is not over yet, but the project team remains less and less likely to win this case. Perhaps the launch of Pavel Durov's blockchain platform will be postponed for a long time, in the worst case, it will not take place in principle.

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