Telegram has dropped its legal fight against the SEC. The messaging company withdrew an appeal of the March injunction that blocked the Telegram Open Network and prevented Gram token distribution, acc
Telegram has dropped its legal fight against the SEC. The messaging company withdrew an appeal of the March injunction that blocked the Telegram Open Network and prevented Gram token distribution, according to court filings published on CourtListener.
The decision ends a legal dispute that stretched back to October 2019, when the SEC filed suit. Federal regulators contended that Telegram had sold Gram tokens as unregistered securities. The crowdsale that started in 2017 and concluded in early 2018 had raised $1.7 billion, at the time one of crypto's largest fundraising efforts.
CEO Pavel Durov announced on May 12 that Telegram would abandon TON development. The federal court order left no room to maneuver, he said, since the prohibition applied no matter where Telegram operated. The company would end its active involvement in the project.
Telegram had shown signs of fighting through not long before. The company offered American crowdsale participants a choice: accept a 72 percent payout or wait for a larger percentage. Telegram expected to launch by April 2021. The March injunction ended that. With the federal bench opposed, withdrawing the appeal amounted to concession.
The timing matters. Durov's announcement came days after the Free TON Blockchain launched, built by community members who had moved forward on their own. Telegram stated it had no involvement in that parallel effort.
Word began circulating that investors across the U.S. and elsewhere were considering legal action against Telegram. By withdrawing its appeal, Telegram signals it has abandoned the fight with regulators. Some of the crowdsale participants may file their own suits.
