Much like Facebook’s Libra, Telegram’s TON network was singlehandedly stopped in its tracks by the Securities and Exchange Commission (SEC) over the private sale of Gram tokens back in 2018. The company has been involved in an on-going legal battle with the SEC ever since it issued an ordinance on October 11th asking Telegram to stop developing its TON blockchain.

Losing backers

Gram, the native cryptocurrency of the TON network, was sold not only in a private sale but also in a limited time sale on Japanese cryptocurrency exchange Liquid for $4 per token. There was a limited sale of the Gram tokens on the platform back in July, this was an offering before the full public sale that was planned for October 2019.

Liquid had no direct contact with telegram but the firm had struck a deal with Gram Asia, a Korean based organization that claims to be the largest holder of Gram tokens in Asia. The companies had arranged an undisclosed number of tokens to be listed for the sale for customers who had passed the usual KYC/AML procedures.

Some reports say almost 1 million tokens were sold.

Investors get a refund

According to the latest reports, users that took part in the sale on Liquid have now received an email from the exchange informing them that the sale of Gram tokens on the platform had been canceled. The funds that were held in the escrow wallet had been returned to those that participated in the sale. A part of the email reads:

“Under the Gram Token Sale Terms of Sale, Liquid is required to return all funds committed by Liquid users in the Gram Token Sale due to the fact that the TON mainnet was not launched by 30 November 2019”.

Furthermore, the Gram Asia website has also been shut down with the message:

“This page will be closed. We sincerely thank all who have been part of Gram Asia. All refunds have been completed”

It is quite evident that the recent blockades placed by the SEC are scaring away backers and investors of TON. Earlier, investors of the project had agreed not to demand their money back, after a majority of them decided to wait for the launch of the blockchain platform until April 2020.

This is not the case now as the SEC then presented fresh evidence in the case on January 10 that alleges Telegram of selling its token even after their ICO was completed. The latest filing has compelled Telegram to provide the SEC with the redacted bank records in full by Jan. 15.

Telegram is one of the many blockchain projects that have succumbed to the pressure from the regulators and have ended before they even began. Things are not looking so good for Telegram itself as TON seems a long way from launch. However, Telegram recently claimed that “if and when” Gram tokens launch, “they will constitute a currency and/or commodity – not securities under the federal securities laws.”