SEC doubted the ability of Telegram to launch a revolutionary blockchain

The trial between the US Securities and Exchange Commission (SEC) and Telegram are gaining momentum: the parties made updated positions. From the Memorandum SEC, it becomes clear that she not only accuses Telegram of illegal public placement of securities, but also doubts that the messenger team, in principle, was preparing to launch a revolutionary blockchain in the form in which he was promised to investors.

Pavel Durov. Photo: TechCrunch/Flickr

What's happened

The Pavel Durov team promised to build a Ton blockchain platform (Telegram Open Network), which will solve the problem of slow transactions, which was faced with Bitcoin and Ethereum, and will be able to replace payment systems like Visa or Mastercard. For this promise, the developers attracted $ 1.7 billion: investors bought tokens of the created platform (GRAM).

Initially, the SEC accused Telegram of actually the developers released securities without registering them in accordance with American law. In the new memorandum, the regulator went further: it is not the fact that the Ton, according to the developers, is ready, because there is no evidence for this. Moreover, even if Telegram is ready, most likely, the product will not correspond to the promises of developers from White Paper and other documents that were offered to investors. This conclusion was made on the basis of expert opinions.

The opinions of experts SEC are given in another document . It is interesting that not only the people specially invited to this are quoted in it, but also simply the publications of The New York Times, The Economist and the industry media (in one of them, Durov’s crypto project is called “$ 600 million Ton of shit”). In addition, SEC quotes unnamed investors who either initially abandoned investment in Ton, or were already disappointed in the process.

The opinions of experts

Here are the main questions for Ton, which SEC formulated on the basis of expert opinions and investors.

• Telegram decided to create a blockchain that will replace Visa and Mastercard, that is, to do what the developers of Bitcoin and Ethereum did not succeed. However, the decisions that they decided to use in Ton are already outdated and therefore "abandoned by other developers." Telegram did not show either SEC or investors the results of the work. There is only technical documentation describing how everything should work.
• The Pavel Durov team really has experience in creating complex services-but there is not a single successful blockchain project.
• The Telegram team promised investors that they could sell Gram for fiat money, but did nothing for this, but did not answer the offers of large exchanges.
• There is still no information about the list of sites that will be ready to sell anything for Gram after launch.
• It is not clear which of the services for Ton, on which Telegram promised to work, are ready, which are not. One of the experts claims that only 8 out of 50 projects spoke about the Telegram team (including Ton Storage, Ton Proxy, Ton VPN) are theoretically implemented.

It looks that SEC has collected more or less all reasonable arguments of skeptics. At the same time, the interlocutors of The Bell among external developers who had the opportunity to get acquainted with Ton test sections, they say that the Telegram blockchain exists at least. According to them, the platform could really start in November, as planned.

What the court will decide

Will new SEC arguments strengthen the regulator's position? It is difficult to answer definitely. Still, Pavel Durov, the official launch of the blockchain’s official launch, has not yet come up. After the start of the proceedings with the SEC, investors agreed to wait for the Ton launch until April 30. Developers and Durov himself claim that Ton is ready and actively tested.

Telegram investors, with whom the Bell spoke, believe in the success of Ton and are sure that the blockchain will be ready on time. The fact that investors were not disappointed in the project also say the results of the voting that Telegram held in October: most individual investors and funds agreed with the transfer of launch to April and did not demand to return the money to them.

The appearance of another side may affect the course of the matter.

The petition to become Amicus Curiae, that is, a “friend of the court”, on Monday submitted by the American Chamber of Digital Commerce-a human rights organization that advocates the rights of blockchain business in the United States. She wants to become an independent party in a case that informs the court on issues that are affected during the proceedings.

For Telegram, this is more good news. The Digital Commerce Chamber believes that the court should not recognize Telegram tokens securities only on the grounds that they are a digital asset and the subject of an investment contract (this is what SEC insists on): the digital asset does not become secure only because it is digital. The chamber insists that there are different types of digital assets related to blockchain: for example, currencies, securities and official tokens. Before starting to regulate them, you need to adopt special laws, which are not in the United States now.