2019 was quite a year for Pavel Durov.
The serial entrepreneur announced and decided to publish the Telegram Open Network, or TON – the blockchain associated with its Telegram messaging application. The idea of TON is to allow users to go beyond the simple transmission of messages and emojis between them, by using the underlying infrastructure of the application to process a cryptocurrency called Gram de totally reliable and secure.
But the U.S. Securities and Exchange Commission had other plans to launch Telegram’s new blockchain product, filing an emergency ban order in October to stop the initial supply of coins. after raising $ 1.7 billion in an unregistered sale.
“Our emergency action today is aimed at preventing Telegram from flooding the US markets with digital tokens which we claim have been sold illegally,” said Stephanie Avakian, co-director of the Division, at the time. the application of the SEC. “We allege that the defendants did not provide investors with information about the business activities of Grams and Telegram, their financial condition, the risk factors and the management required by securities laws.”
But it would seem that this was not enough for Telegram to properly brake its ICO – the SEC managed to find evidence that token sales continued after that. Now, Telegram is joining large entities like Facebook that want to make meaningful crypto games but are held up by regulators and executors. Telegram has some 200 million users worldwide, and the TON blockchain would give them a token economy to participate online. But the US government considers it illegal.
Durov testified in Dubai in early January, the full transcript of which is available online. Although his project seems to be suffering at the hands of regulators and other powers in place, this besieged state is only a reflection and a reminder of his previous career with VK, the Facebook-type social network that has taken over Russia and Eastern Europe.
Durov is no stranger to controversy, especially with regard to his native Russian government. When the Kremlin wanted to access VK user data to identify protesters in 2014, it was enough to sell its remaining stake in the business and flee the country. Durov and his brother had already launched Telegram in mid-2013, so they just started to focus on it.
The telegram was controversial before there was never any mention of the existence of an associated blockchain for payments and transactions. The app relies on encryption and highly secure technologies to prevent others from monitoring or blocking conversations. As such, it has become an app of choice for ISIS fighters and propagandists. The addition of a blockchain system did not really favor the company in the eyes of regulators and other authorities.
Sources suggest that TON has been ready for launch for some time. Just out of a presale in March 2018, Durov and his brother said they were ready to launch this fall, but so far that has not happened. The SEC’s injunction against Telegram only doubles this delay. Purchase agreements for the sale of Gram tokens stipulated that if the network could not be launched by October, token investors would be eligible for a refund after a vote. It was a year marked by bureaucracy and hampered progress for Durov.
Yes, TON is operational in private test mode and would display “extremely high transaction speeds”, but that is not where the company expected to be now. Durov and his team now had designs to operate a robust blockchain for a few hundred million users. Instead, they are deep-eyed in the regulatory mud, trying to clean it so that they can move forward as planned.
We will see if they can get out of a legal puzzle created by an SEC which seems more and more motivated to make an example of TON. If anything, resistance is probably more galvanizing for Durov than anything else. If 2019 was the year when all of TON’s problems collapsed, 2020 may be the year when the project really saw its launch and success. Durov got his start in Russia as an entrepreneur and has considerable experience in dealing with government pressures and business difficulties. The current difficulties of TON simply seem to be a slightly different version of this same drama of the past.
Durov demonstrates certain mindfulness practices – he meditates, does not eat meat and always behaves cool in public. These days, his troubles are with financial regulators instead of Russian government leaders, and even if he shows up at every required meeting of him, he will likely do so with a cool head and a soft voice. This founder knows all too well what it’s like to run a business facing resistance, so we don’t expect to see him hanging up on hats yet.
Pavel Durov is ranked n ° 4 in the first Cointelegraph Top 100 in crypto and blockchain.