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The Almighty Buck

Telegram Abandons Its TON Blockchain Platform (techcrunch.com) 26

Posted by msmash from the end-of-road dept.
Messaging service Telegram said on Tuesday it is abandoning its blockchain platform Telegram Open Network (TON) after a lengthy battle with the U.S. Securities and Exchange Commission (SEC). From a report: "Today is a sad day for us here at Telegram. We are announcing the discontinuation of our blockchain project," wrote Pavel Durov, the founder and chief executive of Telegram, on his channel. A U.S. court made it impossible for the messaging service, used by more than 400 million users, to continue development of Telegram Open Network, he wrote in a blog post. "How? Imagine that several people put their money together to build a gold mine -- and to later split the gold that comes out of it," he wrote.

"Then a judge comes and says: 'These people invested in the gold mine because they were looking for profits. And they didn't want that gold for themselves, they wanted to sell it to other people. Because of this, they are not allowed to get the gold.' If this doesn't make sense to you, you are not alone -- but this is exactly what happened with TON (the mine) and Grams (the gold). A judge used this reasoning to rule that people should not be allowed to buy or sell Grams like they can buy or sell Bitcoins," he added.
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Telegram Abandons Its TON Blockchain Platform More

Telegram Abandons Its TON Blockchain Platform

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  • If they believe that this is an incorrect decision and didn't even appeal the ruling before cancelling the project, than either the project was in trouble, or someone ran the numbers and figured out that the payoff would be minuscule to nil.

  • Completely incorrect analogy (Score:5, Insightful)

    by the_skywise ( 189793 ) on Tuesday May 12, 2020 @02:26PM (#60052842)

    They weren't selling a tangible product (gold) they were selling an intangible monetary instrument (stock) aka a Security. It doesn't matter about the rules of its manufacture or how "limited" it is as a virtual currency which makes it "seemingly real" - it's still CURRENCY and, as such, needs to be regulated which Telegram didn't want to do - so it can't be used in the US.

    • The inconsistency is strong in the way cryptocurrency is regulated.

      For the purpose of taxation, it is not currency, it is a commodity.

      For the purpose of currency regulations, it is a currency.

      Bullshit caused by fear and loathing.
    • They obviously didn't go this way, since it wouldn't have served their pity party; but I suspect that even tangibility would have saved them if they were distributing their crypto-IOUs on any scale.

      If "several" people got together to build a gold mine, sure, maybe the SEC would just classify them as project pals; but if Newcrest Mining or Barrick Gold or the like decided to replace 'shares' with definitely-not-shares-that-entitle-the-bearer-to-receive-a-certain-amount-of-their-mine-output; I'd be very, v

    • It doesn't matter about the rules of its manufacture or how "limited" it is as a virtual currency which makes it "seemingly real" - it's still CURRENCY and, as such, needs to be regulated which Telegram didn't want to do - so it can't be used in the US.

      They better start regulating in-game currency like Bells [slashdot.org] too.

      • That's a grey area, although I think Nook's store could use some government oversight as he obviously supports slavery and predatory loaning practices.

        That's selling virtual "goods".. Second Life has a similar situation with their "Lindens" and before going to direct cash XBox had it with their gamepoints. Even Disney did it with their Disney Dollars. The difference there is that it's still a proxy for regulated cash (and more importantly for the government a money laundering problem). The "proxy" dollar

  • Right.... (Score:3)

    by ceoyoyo ( 59147 ) on Tuesday May 12, 2020 @02:31PM (#60052868)

    From the linked Slashdot article from 2018:

    The company recently canceled the public sale piece of its ICO, the Wall Street Journal reported this week, after it raised $1.7 billion from private sale investors, according to SEC filings. ...

    According to the original whitepaper, the plan was to raise $1.2 billion using both invite-only private investors and an open sale to the public. Telegram later extended the raise to $1.7 billion before it canceled the public sale altogether. That's almost certainly because it had already raised enough money to develop TON without the risk of running into the SEC's ongoing ICO probe by soliciting money from the public.

    So where'd the $1.7 billion go?

  • The ruling makes sense... (Score:4, Insightful)

    by orlanz ( 882574 ) on Tuesday May 12, 2020 @02:31PM (#60052872)

    Banks and even states are not allowed to print their own currency. Credit, loans, points, etc are regulated and are considered cash-equivalent but not currency for various reasons (they live and die).

    But if the intent is for this to be like currency where it is the grease that helps turn the wheels of commerce; that's not allowed. This is a production right reserved by the federal government. The concept is as old as gold.

    • So all cryptocurrency, which is non-national in nature, should be illegal then in your view, is that right?

      • So all cryptocurrency, which is non-national in nature, should be illegal then in your view, is that right?

        Take it a step further an include all the currency used in on-line games and items people farm for.

      • That is a separate topic. This is about who controls the currency and it's monetary policy.

        Things like Bitcoin don't really have a central party controlling it. It's a consensus. It would clearly be illegal if some private entity controls over 51% of it and tries to wield the full power of that. Note it wouldn't be illegal if a govt entity owns 51%.

        Things like card miles, accrued PTO, & points have some strict regulations and are also not seen as liquid as currency; nor do those apparatuses want to bec

    • It can be very hard to see whether particular invention is abstract "points" or "currency that helps turn the wheels of commerce". In fact, fiat currencies themselves are rather silly construct and IMO cryptocurrencies are a strict upgrade. Having your financial system managed by mathematical rules is more dependable than by some government's random fiats.

      • Re: (Score:2)

        by Entrope ( 68843 )

        What is so hard about that? If it's accepted by a broad set of trading partners for a variety of different goods, it's currency. If you can only use it in a closed ecosystem, especially if the available trading partners are closely affiliated with the entity creating the tokens, it is a points system.

        Your opinion and $8 will buy you a coffee, if you can find a coffeeshop that's open these days.

      • A little off topic but:

        Having your financial system managed by mathematical rules is more dependable than by some government's random fiats.

        I will assume that we aren't talking about the centuries of learned mathematical rules & constructs that pervade our society and are the underpinnings of modern monetary policy (ie: credits/debits/interest/supply/demand/etc)

        If it was this simple, life wouldn't have 90% of the joys and pains we experience. Math, Science, Logic, etc. These are fungible concepts when it goes up against a human society. The theories simply don't apply when it comes to human nature.

        On Bitcoin as a cu

        • Yeah you "adjust inflation" to arbitrarily steal people's savings and deepen income inequality. As if explicit taxes are not enough. Here's a hint: if you want to redistribute money in non-scammy way take them away directly. Either that or drop taxation altogether since you print money anyway. Having both mechanisms at the same time is just too much.

      • Not seeing that advantage, crypto currencies too illiquid and too volatile to be money. They're merely game tokens.

    • Re: (Score:2)

      by _merlin ( 160982 )

      Banks and even states are not allowed to print their own currency.

      That isn't entirely true. In the UK, a number of banks had licenses to issue banknotes. Most of them were merged and nationalised as the Bank of England. However, some of the Scottish banks were not included in this, and they are still allowed to issue banknotes that are legal tender in the entire UK. In Hong Kong, several banks including HSBC, Standard Chartered and Bank of China issue banknotes.

  • “Sadly, the US judge is right about one thing: we, the people outside the US, can vote for our presidents and elect our parliaments, but we are still dependent on the United States when it comes to finance and technology,”

    [...]

    “I want to conclude this post by wishing luck to all those striving for decentralization, balance and equality in the world. You are fighting the right battle. This battle may well be the most important battle of our generation. We hope that you succeed where we have failed,”

    TON Community Launches Free Version of Telegram Open Blockchain [cointelegraph.com]

  • a blockchain project failed ? Heaven forfend.

  • Here's one perspective of the dangers of investing in a company via ICOs. Chuck-E-Cheese sells tokens to kids. They have value to the kids...they use these tokens to play games where they can win prizes, so there is some kind of demand. Would you invest in a Chuck-E-Cheese-like startup by buying these tokens ahead of the company launch? And then what? You sell these tokens to kids who want to play games to recoup your investment? Perhaps they're selling tokens at fractions of pennies, and it may be worth it
  • Comment removed based on user account deletion

  • of course them Canadian open source guys have a blockchain, and of course no centralized server...
    https://jami.net/ [jami.net]
    Multiplatform, Linux, OSX, Win, andro... with quite a brilliantly simple interface for so many features, from messaging to call to multiple video chats (on all platforms).
    A kind of super-Signal IMHO, only the initial setup is a bit daring (as you need to create your identity and signature which you must store somewhere)
    H.

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