Telegram founder announces abandonment of blockchain project: "I hope you succeed where I failed"

One of the world's largest messaging apps, Telegram, saw its founder Pavel Durov announce today on his personal Telegram channel that their blockchain project TON is ceasing operations. The announcement primarily expresses dissatisfaction with U.S. regulatory agencies, venting frustrations about regulations and warning users of potential future blockchain projects similar to TON, but with no affiliation to Telegram.

Pavel Durov posted a farewell message titled "What Was TON And Why It Is Over?," stating that the two-and-a-half-year blockchain project Telegram Open Network (TON) will no longer be pursued.

Durov remains proud of TON, noting that it was built upon decentralized mechanisms akin to Bitcoin and Ethereum but with far greater scalability. He believes that its technology, integrated with Telegram, could have potentially revolutionized the way the public saves, transfers, and processes information.

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U.S. Government's Broad Regulations

For Russians, the presence of Durov seems like a real-life version of a hacker mission. At the young age of 22, he launched the mainstream Russian social platform VKontakte, only to leave the country later due to demands from Russian security agencies to provide access to his platform's keys. Ironically, the TON project is now being hindered by U.S. regulatory authorities. Durov stated in the article:

Imagine a few people pooling resources to build a gold mine, with the intention to evenly distribute the gold produced in the future. However, a judge tells the mine owner: many people invested in the gold mine for profit. They don't want the gold for themselves; they want to sell it to others. So, you can't distribute the gold to them.

This is the current situation with TON (gold mine), investors, and Grams (gold). The judge is confusing the public's buying and selling of Bitcoin with Gram tokens.

What infuriates Durov even more is that the U.S. not only prohibits the issuance of Gram locally but also globally. The reason being that if issued in various countries, U.S. citizens could still find ways to access Gram tokens. Therefore, even if countries worldwide have no objections to Gram, the U.S. still decides to block the widespread issuance of Gram tokens. Durov expressed:

If one day the U.S. suddenly decides to ban the sale of coffee and demands the closure of a coffee shop in Italy because some Americans might come to Italy, I doubt anyone would agree with that argument.

I'm very skeptical anyone would agree with that argument.

Where Investors Stand

Having closely followed the TON project, the project that raised nearly $1.7 billion in 2018 announced its failure. Besides Telegram, which has long lacked a profit mechanism, the most affected are the long-awaiting investors.

Previously reported, Telegram triggered a $1.2 billion discount redemption clause due to delayed token issuance. According to the agreement, investors could redeem up to 72% of their funds. Telegram indicated in letters sent to investors at that time:

For those who wish to continue waiting for the token issuance, in addition to redeeming funds at a discount, as a gesture of gratitude for your confidence in TON, we offer you the following choice: by April 30, 2021, you will receive 110% of your original investment, which is 53% higher than the amount terminated at a discount.

This clause was also interpreted due to U.S. regulatory factors, forcing U.S. investors to "discount redeem their initial investment," meaning they can only redeem 72% of the invested amount. With TON now confirmed not to be issued, it remains unclear whether investors in other regions can obtain Telegram's promised 110% alternative. Durov did not address this in the article.

Community-Based TON Project

Durov pointed out that today is the last day Telegram actively participates in the TON project. He warned that there may be future blockchain projects based on TON technology that will have no affiliation with Telegram.

Indeed, in early May, Telegram's technology partner TON Labs decided not to wait for Telegram to resolve regulatory issues and released a forked version called Free TON. The token's total supply is also 5 billion, with 85% distributed for free to TON partners and users, 10% to developers, and 5% to validation nodes.

The Chief Technical Officer of the Free TON community, Mitja Goroshevsky, commented on Durov's declaration to Cointelegraph:

Clearly, Durov was forced to make this statement, but I agree with all his points, especially the final statement about decentralization. This aligns perfectly with Free TON's goals. We will continue to develop globally, build infrastructure, and distribute TON tokens; we will put it in the hands of millions because that's the right goal!

Durov emphasized the importance of decentralization at the end of the article: I wish all the people in the world fighting for decentralization and equality. You are fighting the right fight, and this may well be the most crucial "battle" of our generation, hoping you succeed where we failed.