Telegram Token Investors Reject Refund Offer

Investors who bought the firm's gram token have agreed to accept an extended issuance date in the hope they'll still turn a profit.

AccessTimeIconOct 24, 2019 at 10:15 a.m. UTC
Updated Sep 13, 2021 at 11:37 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Investors in Telegram's blockchain project have opted to stick with the firm despite the U.S. Securities and Exchange Commission (SEC)'s recent injunction against the messaging platform’s token offering.

Both groups of investors in Telegram’s twin $850 million funding rounds have now agreed to accept extensions for the Telegram Open Network launch following the Oct. 23 deadline.

An email sent to one group of investors and obtained by CoinDesk reads:

"We are happy to share with you that we have successfully obtained the consent of a significant majority of investors in both the Pre-Sale and Stage A to extend the deadline for the Network Launch to 30 April 2020. We would like to thank everyone for your support. This extension allows us to proceed with the necessary regulatory work described in our last e-mail."

The offer to accept the extension was sent to TON investors a week after the SEC’s Oct. 11 injunction claiming the gram token is a security.

Under the terms of the agreement, a majority of ICO investors would either agree to extend the token issuance date or receive 77 percent of their initial investment back. Each investor cohort had to agree as well, meaning one group could have been refunded while the other held onto the promise of gram tokens. The issuance of the token is now slated for April 30, 2020.

"We voted to wait, although we're sure Telegram will not be able to clear things with the SEC," one of the TON investors told CoinDesk on the condition of anonymity.

He predicted that TON will launch, but lose the battle with the regulators and, as a result, lose huge markets such as the U.S., Russia, China and possibly some European countries. However, as a first-round investor who bought grams at 37 cents apiece, he still hopes to make money on the investment:

"There is a chance that we will get more than we would receive if Telegram just returned out investment, and, at the end, we didn't invest that much."

The terms of the agreement also include that Telegram can spend another $80 million of the ICO funding. The seventh month period will be used to further develop the TON ecosystem, according to the company.

An Oct. 24 court hearing on the question of gram being a security was also postponed till February 18–19. In a letter to investors sent out on Oct. 21, Telegram called the delay a positive development that will give it time to prepare its case:

"The February hearings are different from the earlier scheduled for October 24, because at these hearings they should only consider the possible postponement of the launch of the platform. We and our advisers will use the time to ensure that at the February hearing, the Telegram position is presented and supported as much as possible."

UPDATE (Oct. 24, 13:45 UTC): A quote was added from an email sent to one group of investors obtained by CoinDesk.

Telegram image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.