Home Crypto News After TON’s Demise, US-Based Blockchain Projects “Need to Launch ASAP”

After TON’s Demise, US-Based Blockchain Projects “Need to Launch ASAP”

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2019 was marked by a lot of high-profile court docket instances between varied cryptocurrency corporations and the department of the United States authorities generally known as the Securities and Exchange Commission, or SEC.

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Perhaps essentially the most well-known battles of the 12 months had been fought between the SEC and two encrypted messaging corporations that had, for separate causes, made actions towards crypto: the Canada-based Kik, which held a $100 million sale of “KIN” tokens in 2017, and Berlin-based Telegram, which offered $1.7 billion price of “GRAM” tokens for its “TON” community in 2018.

While Kik appears to have pulled out all of the stops to proceed to combat its battle in opposition to the SEC, Telegram appears to have made a special determination. Earlier this week, Telegram founder Pavel Durov introduced an vital determination: the corporate is giving up on the mission.

“Today is a sad day for us here at Telegram,” Durov wrote in his public channel on Tuesday. “We are announcing the discontinuation of our blockchain project.”

A weblog put up that accompanied the announcement defined that basically, the SEC’s profitable of a preliminary injunction in a U.S. court docket was what induced Telegram to make the choice. This preliminary victory prohibited Telegram from launching TON or distributing GRAM tokens.

The transfer is especially stunning due to Telegram’s announcement lower than two weeks in the past that it might be launching the community in April of subsequent 12 months.

What led to the sudden shift?

Telegram “could never live up to its own whitepaper.”

“Pavel Durov was between a rock and a hard place,” defined Will Martino, co-founder and CEO of blockchain agency Kadena. Martino additionally beforehand helped construct JP Morgan’s first blockchain, generally known as “Juno”, and was the Tech Lead for the SEC’s Cryptocurrency Steering Committee.

“On one side, TON violated well-established fundraising norms and laws regarding the insanely large amount raised along with the promises of high liquidity and returns at launch,” Martino defined.

“On the other side, TON oversold what it could technically deliver to such an extreme degree that it could never live up to its own whitepaper.”

In reality, Martino believes that “TON was doomed from Day 1,”  “My ‘I’m-not-a-lawyer’ suggestion to anybody that requested for my opinion was to keep away. My ‘I’m-an-engineer’ opinion was that TON was not possible.”

Will Martino, co-founder and CEO of blockchain agency Kadena.

Instead, Martino believes that the mission was “a classic overheated market moonshot venture that was begging to be made into an example.”

“From the beginning, there was way too much hype, and that’s saying a lot in crypto.”

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Perhaps for this reason Martino doesn’t appear to have discovered the choice to abandon the mission very stunning–as a substitute, “what’s surprising is that TON had telegraphed that they were in a position to make a really good defense from a regulatory perspective,” Martino stated.

After all, “they had a world-class legal team to execute their case.”

Therefore, the selection to abandon the mission is probably going the one choice that Telegramultimately discovered itself with: “they took the case in a direction that ultimately lost,” Martino stated. “Given the high caliber of their legal team, I would not be surprised if, during discovery, it became clear to TON that they needed to shut down the project.”

The US Government “could not let TON go unchallenged.”

TON’s defeat additionally appears to be a part of a higher sample of US authorities pushback in opposition to huge tech corporations who try to foray into cryptocurrency: in spite of everything, as well as to the SEC’s battle with Kik, Facebook’s Libra mission has been the topic of a lot hearth and fury from lawmakers within the United States.

Therefore, the victories that the US authorities has had over these high-profile crypto initiatives–the quashing of TON and the delay of Libra’s launch, in addition to modifications to its whitepaper–appear to ship a transparent message to different huge tech corporations who need to launch crypto initiatives.

“Libra has withered due to Facebook’s hubris,” Martino stated. “TON is now dead because it was too big to fly that close to the sun without getting burned.”

Indeed, “the United States government could not let TON go unchallenged given the attention and significance of the project for the crypto industry at large.”

Telegram will need to have seen this coming: “evidence submitted by the SEC showed that the government was well-prepared to make their argument that TON had not adhered to existing regulations.”

What does this imply for the way forward for crypto within the United States?

Therefore, whereas corporations like Kik and Telegram could have sought to “pave the way forward” for different tech corporations to transfer into crypto, their efforts could have backfired: if something, the SEC and the remainder of the United States authorities could have used these authorized battles as a manner to sharpen their regulatory knives.

“Following Kik’s Kin, Facebook’s Libra, and now Telegram’s TON, the SEC has shown that it is extremely clear and consistent on one point,” Martino defined: “in case you’re an current social [or] chat utility, you can’t ignore the legislation and launch your individual cryptocurrency.”

And Martino believes that the US will solely proceed down the trail of authorized restriction: “my sense is that by 2021-2022, it will be impossible to launch a public blockchain in the United States unless the regulatory landscape changes,” he stated. “Unfortunately, the TON case only makes that more likely.”

Therefore, time is of the essence: “every US-based blockchain project that hasn’t launched yet needs to do so ASAP,” he stated.

“This comes at a time when other countries, especially China, have committed significant resources to develop their blockchain capabilities. The US is at risk of falling behind when it comes to being a major player in the future of technology.”

Finance Magnates reached out to Telegram for commentary, however didn’t hear again earlier than press time. Comments will probably be added as they’re acquired. 

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