Due to relentless pressure from US regulators, Telegram announced that it would delay the release of its Gram tokens until April 2021. The hugely popular encrypted messaging app continues to battle against the SEC about the classification of GRAM tokens. Consequently, the news symbolizes another shift in strategy from the social media giant.
News of the postponement came via a letter from Telegram officials to the Telegram Open Network (TON) community. Importantly, the document told TON investors that the firm would not meet its previously discussed April 30th, 2020 deadline. Additionally, the letter described the current state of negotiations with US regulators and other options investors can pursue.
Telegram Provides Investors Options
The key takeaway of the letter is that GRAM token investors now have a few options to consider moving forward. The company stated that investors that don’t want to wait out the regulatory storm can file with the firm to receive a refund. Importantly, investors that go this route will receive 72% of their initial investment.
Interestingly, Telegram floated another option for investors to consider that was a bit unexpected. The letter also gives investors the option to convert the funds into shares of the Telegram messaging platform. For their patience and workability, the company would provide each investor with a 10% bonus if they go with this choice. This is a clever move on the part of Telegram which currently is one of the largest messaging apps in the world.
Telegram has shown no hint of dropping its crypto asperations. In fact, the company appears to be ready to do whatever it takes to please US regulators. The letter to investors highlights the firm’s commitment to the TON platform. The letter explains that Telegram plans to now revamp their SEC filing with the hopes to acquire the proper permissions no later than April 30th, 2021.
Additionally, Telegram is not ignorant of the fact that there is a chance that regulators are not willing to budge on large social media cryptocurrencies at this time. In this scenario or any case where the company is unable to obtain the required permissions, Telegram could repay investors through an equity sale.
The situation seems a bit precarious for Telegram at the moment because the SEC hasn’t shown any interest in large social media platforms entering the financial sector. To date, regulators have halted the release of GRAMs on two separate occasions. In the first instance, regulators simply paused the project. Sadly, last month the SEC officially pumped the brakes on the GRAM token. Now, regulators want to label GRAM tokens as securities. This designation would require Telegram to adhere to securities legislation currently in place in the US. Consequently, the group would need to refund investors and seek yet another SEC approval.
In response, the firm requested the ability to launch GRAM tokens internationally. The company promised to prohibit any US investors from the crowdfunding event as part of the plea. Unfortunately, the SEC was not convinced that the company had done enough to guarantee its promises. Notably, the Blockchain Association issued a statement following the decision that described how and why regulators failed in this decision.
Telegram Investors Left Waiting
Now Telegram must continue to fight for the ability to issues its tokens. Investors in the platform have shown incredible patience and a belief in the future profitability of the TON strategy. However, as regulators continue to delay the project, this scenario could change quickly. For now, Telegram and US regulators are set to square off again in the coming months.