Encrypted messaging giant Telegram is reportedly postponing the launch of its TON blockchain platform. The Telegram Open Network (TON) is designed to enable instant payments and host decentralized applications.
Telegram notified investors that the TON mainnet was now scheduled to go live on April 30, 2020, instead of October 30, 2019.
According to CoinDesk, the encrypted messaging service provider sent an email to investors acknowledging that the U.S. Securities and Exchange Commission (SEC) did acquire a restraining order against it, which prohibits the London-based firm from launching TON and issuing Gram tokens.
The SEC believes that Grams are unregistered financial securities and indicates that Telegram’s $1.7 billion initial coin offering was conducted illegally.
The email sent to investors who participated in the second of Telegram’s two $850-million investment rounds from 2018 reads,
“We had intended to launch the TON network in late October. However, the recent SEC lawsuit has made that timing unachievable.
We disagree with the SEC’s legal position and intend to vigorously defend the lawsuit. We are proposing to extend the deadline date in order to provide additional time to resolve the SEC’s lawsuit and work with other governmental authorities in advance of the launch of the TON network.”
The deadline can only be extended after obtaining approval from investors holding the majority of the tokens.
The investors from Telegram’s token sale in February 2018 must approve the extension separately from the investors who participated in the company’s March 2018 sale.
Telegram’s management states,
“In these circumstances, we propose to make certain limited amendments to the terms of the purchase agreements that remain in place to reflect the fact that fewer Grams will be issued and in circulation on the Network Launch Date.”
Investors from the second round are required to sign a form approving the delayed launch before October 23. If the majority of investors decide not to sign, then investors will receive “approximately 77 percent” of their money back.
A separate communication from Telegram was sent to the first-round investors.
Telegram is planning to spend an additional $80 million on the project if the deadline is extended.
A court hearing on the case will be held on October 24 in New York.