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Telegram’s 300 Million Users May Be Able to Trade Cryptocurrency

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Telegram

Telegram

Crypto bull runs often result in developments that often seem a bit farfetched, but at the end of the day, almost everyone wants to cash in on the phenomenon. It happened in 2017, and it is happening once against in 2019 as Bitcoin led the massive crypto surge in the first half of the year.

Naturally, some of the world’s biggest tech companies are now getting an interest in Bitcoin as well as in the wider crypto ecosystem. It has now emerged that messaging platform Telegram, which is best known for providing complete privacy to its users, is going to introduce crypto trading.

Big News

According to reports, the messaging app is going to provide a crypto trading facility by way of Bitcoin and Button Wallet, the company that is involved in providing crypto wallets. It is important to note that Telegram has a massive user base of around 300 million, and if the company can leverage that user base, then the whole thing could turn into a success. The Chief Executive of Button Wallet, Alex Safonov, stated that this initiative will help in the process of mass adoption of cryptocurrencies, particularly as people do not need to use fiat money for trading purposes.

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The whole thing is simple and should not be difficult for the average Telegram user to pick up. The user needs to activate the Telegram Open Network wallet, which is powered by Button Wallet, and will then be provided with 6.6 testnet grams to use in the account. It is important to note that Button Wallet supports all the major cryptos, including Ethereum, Bitcoin, and Litecoin. Hence, a user will be able to transfer such coins into their new wallet and commence trading with other users on the platform. That being said, it remains to be seen how many users will actually use it once it is launched.

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Telegram Denies All SEC Allegations and Requests Dismissal of Trial

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Telegram

Telegram

Telegram has refuted allegations by the US Securities and Exchanges Commission in court, which claim that the planned Gram token from the messaging app is a security and, therefore, subject to regulations from the commission and has requested that the trial be dismissed because of this.

Last month, the SEC successfully sought an injunction preventing Telegram from launching TON due to the fact that the ICO used to raise funds to develop the network was illegal. As a result of the injunction, investors in two separate ICOs were offered the chance to receive 77% of their initial investment back, but have instead decided to back Telegram’s blockchain plans and have accepted an extension on the launch of TON until April 30, 2020.

“[The SEC’s] claims are without merit as Telegram’s private placement to highly sophisticated, accredited investors was conducted pursuant to valid exemptions to registration under the federal securities laws and Grams will not be securities when they are created at the time of launch of the TON Blockchain,” said Telegram in the latest filing. However, the SEC has responded by warning Telegram and other issuers that they cannot escape federal securities laws by simply labeling their product as a cryptocurrency or digital token.

The messaging app did concede that it had not filed an official registration statement with the commission due to the fact that “none was, is or will be required under the federal securities laws,” and went on to accuse the federal body of engaging in “improper regulation by enforcement.” As a result, Telegram has requested that the Southern District Court of New York dismiss the claims made against it.

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No resolution on the matter will be reached until next year at the earliest, with the next hearing scheduled for February 18 and 19. That hearing was due to take place last month but had been pushed back in order to allow both parties adequate time for discovery.

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Telegram Hit By New SEC Evidence Showing Token Trading After ICO

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Telegram

Telegram

The SEC has produced new evidence in its case against Telegram, which shows that the company was engaged in trading Gram tokens several months after its initial coin offering (ICO).

Messaging app Telegram has been embroiled in a lawsuit with the US Securities and Exchanges Commission, which alleges that US$1.7 billion raised from the sale of Gram tokens between January and March 2018 should have been registered with the authority because the tokens constitute a security. Telegram has consistently refuted these claims and published a statement last week to address the ongoing case.

However, the SEC has produced damning new evidence, which shows that at least two entities invoiced Telegram for commission from selling Gram tokens in June and July of 2018, several months after its ICO ended. Investment fund Da Vinci Capital and Gem Limited, a Maltese-based firm, which was included in the Paradise Papers, requested commission of $209,783 and $1.1 million, respectively, for “subsequent sales” of Gram tokens.

According to the invoices presented by the SEC, Da Vinci Capital sold over US$2 million worth of Gram tokens to ITI Funds on June 20, 2018. Gem Limited sold US$8.6 million of Grams to Goliat Solutions and a further US$4.5 million to Space Investments Limited on July 2, 2018.

“These documents undermine Telegram’s claimed affirmative defense that the Offering was exempt under Regulation D. First, Telegram either raised more than the $1.7 billion for which it claimed an exemption, or it did not raise $1.7 billion as of March 29, 2018 and the later funds may have been raised through underwriters,” an SEC filing said. Regulation D is intended to prevent purchasers of tokens from acting as underwriters, meaning they essentially sell securities to the issuer for a commission.

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The SEC has successfully sought an injunction against Telegram, which will prevent it from launching its TON blockchain and Gram tokens until the case is resolved. Both parties will return to court on February 18 and 19.

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Telegram to Launch Its Telegram Open Network (TON) in October

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Telegram

Telegram

Telegram has indicated that the Telegram Open Network (TON) could launch at the end of this month. On Wednesday, in an email to TON investors, the firm indicated that the launch is on track as planned earlier.

TON Could Be Ready by October 16

The CTO of TON Labs, Mitja Goroshevsky, confirmed the information indicating that TON Labs will be responsible for running and managing the validation pool. TON Labs is a startup tasked with the responsibility of creating tools for TON developers. Investors will receive the TON key generation software, and they will have to provide Telegram with a public key for them get their Gram tokens (GRM). GRM is the native token of the platform, and investors will receive this by October 16. The source code for Telegram Open Network is currently available on Github.

Telegram has indicated that it will absolve itself from governance issues as it will not run the network. A message to investors indicates that they will have to select their validators. Neither TON Foundation nor Telegram will act as a validator after the launch of the network.

The launch of the network comes after the successful testing stage. At the beginning of last month, TON released its code, which allowed the community to test full nodes as well as validator nodes then followed by the alpha version of the GRM token wallet.

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TON Developed in Secrecy

The existing agreements between TON and investors require the project to launch before or on October 13. The blockchain raised around $1.7 billion at the beginning of last year, and development has been going secretly. For instance, the CEO of Telegram, Pavel Durov, has never spoken of the existence of the network publicly. The only confirmation about its existence is the registration with the US SEC of the SAFT, which features the name of the firm Telegram Group Inc., the CEO, and his brother Nikolai Durov, who is the chief architect of TON.

Last week, Telegram indicated that it is running a coding competition for the development of smart contracts using tools provided in the TON network.

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Telegram Releases Test Gram Wallet Despite Pending SEC Suit

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Telegram

Telegram

Telegram has released a test version of its desktop wallet for its own digital coin, known as Grams, despite an injunction from the SEC preventing the launch of its planned blockchain, Telegram Open Network (TON).

Users can download the desktop app on Windows, macOS, and Linux 64 bit from Telegram’s official website. The app greets users with the message, “Now you have a wallet only you control – directly, without middlemen or bankers.” Users can also engage in test transactions with Grams distributed by a special Telegram bot; however, it warns that these transactions could be delayed at times of high traffic.

The launch of TON, the ambitious blockchain from the messaging app, was delayed last month after the SEC argued that the ICO used to fund its development was illegal. Telegram began raising capital to fund its blockchain project from two separate offerings, which took place between January and March of last year. The company reportedly raised $1.7 billion USD from the sale of 2.9 million Grams, of which approximately $424 million came from the US, which falls under the jurisdiction of the SEC.

The SEC argues that Gram tokens are technically a security, and because Telegram failed to register the ICO with the commission, it was therefore illegal. Telegram has been cooperative with both regulators and its investors in finding a solution to the impasse, and today’s launch clearly shows that the company is focused on carrying through with its plans to launch TON.

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The project has drawn the eyes of the crypto world, with a secondary market springing up for Gram tokens earlier this year yielding returns in excess of 400%. Under the terms of the highly secretive ICO, initial investors risk voiding their tokens if resold on a secondary market, yet this failed to deter many. Telegram will meet with the SEC on February 18 and 19 of next year to discuss how to move forward with its plans, with TON’s new launch date scheduled for April 31, 2020.

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Telegram Investors Stick With TON Plans Despite SEC Injuction

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Telegram

Telegram

Telegram investors have turned down the offer of a refund on their investment in the TON ICO despite an injunction by the SEC delaying the launch of the network.

Telegram, which is an important part of the crypto ecosystem due to its encrypted communication abilities, has been embroiled in a dispute with the US Securities and Exchange Commission, which argues that its planned blockchain, Telegram Open Network (TON), is a security, meaning the ICO was actually illegal. The commission issued an injunction last week preventing the company from launching TON as planned this month.

As a result of the injunction, investors in two separate ICOs have been offered the chance to receive 77% of their initial investment back, but have instead decided to back Telegram’s blockchain plans and have accepted an extension on the launch of TON until April 30, 2020.

“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,” according to an email sent from Telegram to one group of investors.

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Telegram began raising capital to fund its blockchain project from two separate offerings, which took place between January and March of last year. The company reportedly raised $1.7 billion USD from the sale of 2.9 million Grams. One billion of these tokens went to a group of 39 US investors, meaning approximately $424 million of Telegram’s capital came from the US, which falls under the jurisdiction of the SEC.

A court hearing was due to take place today on the question of whether Grams constitute a security, but that has now been pushed back until February 19, 2020.

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Coinbase to List Telegram and Polkadot Cryptocurrencies Soon

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Coinbase

Coinbase

Over the past few years, plenty of new cryptocurrency exchanges have been established worldwide, but very few can claim to be as influential as Coinbase. The US-based cryptocurrency agency has a wide range of offerings and a large number of customers, which makes it the most coveted listing for many tokens.

Due to the sheer number of users and the fact that a large chunk of crypto investors in the US use the exchange, a listing naturally means a big deal for a crypto token. In a new development, the company has announced that it is going to list as many as 17 new cryptocurrencies to the existing pool.

Key Details

Over the years, the company has been well known for being extremely picky with regards to the tokens that it actually lists and hence, a listing on Coinbase is such an important milestone for any crypto project. The possibility of the latest additions was announced in a blog post from the company. Some of the highly anticipated cryptocurrencies that are going to be added include Telegram and Polkadot, among 15 others.

It still isn’t known when most of these coins will be going live, but the fact that it is happening at all is enough to generate excitement among the crypto community.

>> Binance.US Opens for Account Deposits, Excludes 13 States

Back in 2018, the company stated that listing announcements were going to be far more frequent than in the past and this is an indication of the fact that the company is going to deliver on its promise.

However, at the same time, it needs to be kept in mind that the due diligence done by the company remains as stringent as ever and it is certainly going to require that crypto projects pass all kinds of hurdles before they are eventually listed on Coinbase. At this point in time, the non-pro exchange lists only 10 cryptocurrencies.

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Telegram Releases Eagerly Awaited Update on Future of TON

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Telegram

Telegram

Messenger app Telegram has released a long-awaited update on the future of its TON blockchain and its native Gram tokens, clarifying certain aspects of the project as it remains embroiled in a lawsuit by the US Securities and Exchange Commission as to whether two ICOs conducted in 2018 should have been registered with the commission.

Telegram messenger is an immensely popular platform in the world of crypto, central to the discourse on the topic, and has been working on developing its own blockchain since 2017. Multiple rumors have been spreading regarding the project, and while Telegram has remained very tightlipped due to that pending SEC suit, the company issued a public notice on January 6 to address these rumors.

Grams are Not Available for Sale Yet

The first such misconception addressed by Telegram is that Grams, the native token to the TON blockchain, are not for sale and technically do not even exist yet, despite several websites claiming they are official Gram resellers. Telegram has noted that it is not affiliated with any of these vendors and states that the TON blockchain remains in beta testing. In August, it was reported that a secondary market for Gram tokens had sprung up and was seeing returns in excess of 400%, despite Telegram claiming that any resold tokens would be canceled.

TON Blockchain Will Be Decentralised

Telegram has said that it will likely never develop any applications or features for the TON blockchain itself. “Rather, it is Telegram’s goal and hope that the decentralized community of third-party developers and others will contribute to the TON ecosystem through the development of applications and smart contracts,” read Monday’s statement. The messenger service went on to add that TON will always be open source and publicly viewable, meaning it will have no control over the blockchain.

TON Wallet Will Not Be Integrated into Telegram App

Lastly, the Telegram team said that its TON Wallet Application will be released on a standalone basis and will not be integrated into the messenger app. The TON Wallet is intended to compete with other crypto wallet services, but the company did not rule out integration at some point in the future to the extent that the law and regulators would allow.

The SEC Suit

The update from Telegram appears as though it is intended to provide further clarity to several misconceptions that have arisen around the project in light of the SEC lawsuit. Between January and March 2018, the company raised in excess of $1.7 billion USD from 171 investors to fund the development of the blockchain; however, the SEC claims that this fundraising constituted an ICO on Gram tokens and should have been registered with the commission.

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No solid launch date has been set for the release of TON after the injunction prevented the release of Grams until April at the latest. The SEC suit will continue with two further hearings scheduled for February 18 and 19.

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Blockchain and Social Media | A Match Made in Heaven?

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social media

social media

Social media platforms of the new future will be very different from what we have today, that is if the current trends are to sustain. Social networking is not an old phenomenon. It has picked up in the last two decades. At the dawn of the internet, as it started to gain mainstream adoption in the early 90s, the only thing we could do was view information and send messages via email. Later on, as the decade progressed, online search started to become a big thing, and later microblogging caught on, albeit at a small scale.

Instead of just viewing information, the idea of sharing and forming platforms started to grow. America Online (AOL) could be viewed as heralding this era when it enabled the creation of member profiles that were searchable. Nonetheless, major strides in social networking were not made until after the dot com bubble burst in 2000. The new era of social networking sites began. Friendster was launched in 2002, then Myspace in 2003, LinkedIn also in 2003, and Facebook in 2004. Even Google launched Orkut, a social networking site, in 2004. It has since shut it down.

Facebook and Myspace became the two leading social networking sites until Facebook dominated. Facebook specifically did a few things differently from Myspace that worked—starting by targeting university students, understanding its core product value, etc.—and these things eventually allowed it to increase engagement and capitalize on ads.

Later came Twitter, YouTube, Instagram, and Snapchat—all with one core idea—giving a platform for people to share their daily life experiences. User-generated content became the main thing. To monetize the platforms, the only viable model was through allowing companies to place ads while people used the service for free. As people generated more content, engagement grew. As time went by, more customer data was being analyzed and tracked in order to give better ad placement than TV and other traditional platforms could offer.

This has been the dominant model for social media platforms, but major problems have arisen from this model.

Hacking and data leaks have been a huge problem, perhaps the most concerning. Facebook allows third-party developers to create applications that work on Facebook’s platform. Recently, we learned about how this has been abused, exposing users’ records, names, passwords, comments, etc. It started with the Cambridge Analytica scandal. LinkedIn also had a password breach.

Too many ads can lead to a bad customer experience. Many social media companies, in a bid to increase revenue, found more ways to customize ads. The length of time a person stays on a platform became the main metric, and all efforts have been done to increase staying time. The centralized control of social media companies means that they optimize for engagement and ease of use in order to make better targeting for advertisers. Sometimes this comes at the expense of users.

Even with increased staying time, the majority of the value generated accrues to the platforms themselves and not the users who are the creators of the content.

Fake accounts, spamming, and bots are also becoming a menace for current social media platforms. For example, Facebook recently said that in the first quarter of 2019, it had removed 2.2 billion fake accounts. That is a high figure, even though Facebook says it is able to flag fake accounts within minutes of registering. In addition, how to manage privacy in an ad-based model is still a challenge.

Finally, there’s online harassment and hate speech. This has always been a problem but has especially become so in the last few years. The only way a user can really deal with this is by reporting the account; beyond that, the jury is still out on how best to solve the issue of online harassment and hate speech.

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It Started with Bitcoin

The launch of bitcoin in 2009 sought to change the way we view and use money. Satoshi outlined the vision of a decentralized, censorship-resistance internet-based money. Bitcoin has acted as a currency and medium of exchange, enabling borderless mechanisms to store and exchange value. The idea is to reduce centralized control and the single point of failure, which can be prone to manipulation and locks out many, especially those in countries with failing monetary regimes and a lack of ways to transfer value cheaply across national borders. This aspect of decentralized networks has caught on and is now being extended beyond money to other areas.

Ethereum later came in 2015, introducing the idea of a platform to build and launch decentralized applications. Hundreds of use cases have evolved from here: fundraising (ICOs), prediction markets, data storage, etc.

Social media is one of the use cases. As outlined above, some of the major challenges of existing social networks can be solved by decentralized networks if they work as envisioned.

  1. Reduce powerful corporations controlling huge chunks of data;
  2. Deal with problems of bots and fake accounts;
  3. Incentivize good behavior through tokens—this could reduce spamming/trolling;
  4. Enable contributors to earn based on the content they share;
  5. A payment system.

Let’s look at some of the existing projects trying to solve the problems currently plaguing social media.

Steemit

Steemit was an early blockchain startup that showcased how the technology could be used to benefit content creators. As a decentralized alternative to platforms like Reddit, users are able to create accounts and start posting content. When it becomes popular, they earn Steem tokens.

This way, spam content is eliminated. Users can exchange tokens with other cryptocurrencies or fiat on exchanges. Started in 2016, it has now amassed 1 million users. However, it has not yet achieved scale to rival any of the existing social media platforms.

Voice

Block.one, the company behind the EOS cryptocurrency, announced on the first anniversary of EOS mainnet on June 1, 2019, that it was launching a social media platform called Voice.

The information available from the launch says that the platform will seek to eliminate bots through a special authentication process when onboarding users. If successful, that would eliminate one of the main challenges of managing fake accounts and bots on traditional social media.

The Voice token will be at the center of the network whereby users receive Voice tokens based on the content they share and by collecting likes. The token cannot be obtained in any other way, such as mining, but only through the platform, and it can be spent promoting users’ own posts.

Facebook’s Libra

Even the existing social media platforms such as Facebook are realizing that this is not a passing façade.

Facebook first came out in support of blockchain in 2018 when its CEO said that they were looking into blockchain as possible solutions for their privacy woes. Later in December 2018, it has heavily been reported by various new platforms such as Bloomberg that, finally, Facebook is launching its own cryptocurrency, Libra. The announcement came on June 18, 2019. and Libra is expected in 2020.

Libra is to be in the form of a stablecoin for facilitating payments on Facebook’s platforms. According to the whitepaper, the project is a collaboration of 27 other partners which form the Libra Association; each partner contributes $10 towards the project and hosts a node. Facebook formed Calibra, which is to be Facebook’s own representative in the Libra Association. David Marcus, head of Calibra, says that members are expected to grow to 100 by the time the launch.

Libra is meant to facilitate payments across the world. Facebook would benefit by enabling its 2.2 billion users to have a way to make payments easily and cheaply. Further down the line, Libra could be used to enable users to pay for ads on the platform.

Nonetheless, Facebook has received a lot of backlash from lawmakers in both Washington and Europe. Reports also indicate that China could launch its own version to compete with Libra.

This is not the first time Facebook has experimented with digital tokens, having launched Facebook credits in 2009 to enable users to purchase items such as games on the site before terminating the project after it failed to gather traction. However, with the rise of cryptocurrency tokens, could this social media platform have now found a way?

>> John McAfee Reiterates His $1 Million by 2020 BTC Price Prediction

Telegram

Telegram, the messaging platform, is also building the TON, or Telegram Open Network, which will enable users to undertake e-commerce.

Telegram raised $1.7 billion in 2018, making it one of the biggest ICOs ever. In February this year, The Block reported that the project was 90% complete and would be launched in Q3 of 2019.

Telegram aims to launch GRAM, the native token powering the TON. To add to messaging, the TON is expected to enable payments via GRAM, a decentralized marketplace, and peer-to-peer file hosting as explained in its technical whitepaper. The project is speculated to be in testing mode currently, and more details will be availed when the project is fully launched later this year.

With 200 million monthly users already, the launch of TON could radically change messaging as Telegram is already one of the most widely used non-blockchain based messaging platforms, particularly for ICOs, mainly because of its privacy features. If TON is successful, this could solve the monetization challenge of the platform, since the founder Pavel Durov has publicly said that Telegram will never allow ads as a method of monetization.

From Now On

For the majority of the new and upcoming blockchain-based social media platforms, incentivizing good behavior, payment channels, and rewarding users for sharing content seems to be the core tenets of blockchain-influenced social media.

Until now, the only viable way to make money by being on social media as a user has been growing a following or fan base to high numbers, having some level of influence, and then endorsing or sponsoring products through which the user can earn a commission based on set metrics.

However, for the majority of the remaining users, there is no incentive not to troll, spam, and so forth. With tokens, the idea is to reward those who spend more on the platform, sharing updates, pictures, stories, and the like. Social media giants such as Facebook have come under pressure for generating billions of dollars in ad revenue based on content created by users while users do not benefit directly. Native platform tokens could unlock this problem. The extent to which this will work remains to be seen, but at the core, it challenges the fundamentals of how not only social media but also by extension, the internet has been built so far.

Privacy, payments, and control over data seem to be at the core of how the future of social media is going to work.

Time will tell.

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Telegram Token Sales Canceled By Liquid Exchange

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Telegram

Telegram

Japan-based Liquid Exchange has canceled the sale of Telegram’s Gram tokens and returned funds to customers as the messaging app company remains embroiled in an SEC lawsuit.

The exchange has said that it is acting in compliance with the investor agreement, which states that Telegram’s Open Network (TON) should have been launched by October 31, 2019; otherwise it must initiate the process of returning funds to investors. As a result of the longstanding lawsuit brought against the messaging app by the SEC, an injunction has been brought out to prevent the launch of TON indefinitely.

In a blog post posted earlier today, Liquid said, “The Gram Token Sale on Liquid has been canceled, and all funds that were held in escrow by Liquid have now been returned to Liquid users who participated in the Gram Token Sale. Every Liquid user that submitted a purchase order for Gram tokens via Liquid will receive an email in the coming days with further details.”

Despite being one of the largest early investors, Liquid’s Gram sale is totally unaffiliated to Telegram due to the terms of sale in the original ICO, which state that the reselling of Gram tokens within the first 18 months from the launch of TON is prohibited and could lead to the cancelation of the tokens. Despite this, a secondary market for Gram tokens quickly sprung up, with some investors seeing gains in excess of 400%.

>> Ethereum (ETH) Soars 35% in a Month: What to Expect Now?

Telegram has been fighting a lawsuit with the SEC after the commission alleged that Gram tokens are, in fact, a security, and therefore the US$1.7 billion raised by way of an ICO in early 2018 should have been registered with the commission. Telegram has unequivocally denied all allegations leveled at it; however, it was hit with new evidence this week, which appeared to show that at least two entities invoiced Telegram for a commission from selling Gram tokens in June and July of 2018, several months after its ICO ended.

Telegram is set to return to court with the SEC on February 18 and 19, when more clarity should be provided on the future of TON and Gram tokens.

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