Telegram ended its active role in TON after U.S. court block

Telegram founder Pavel Durov announced on May 12, 2020 that Telegram would not proceed with the Telegram Open Network and that the company’s active involvement with TON was over. The decision ended Telegram’s effort to launch its planned Gram cryptocurrency after a federal court blocked delivery of the tokens.

The announcement mattered because TON was not a small experimental offering. A March 24, 2020 federal opinion recorded that Telegram had received $1.7 billion in 2018 in exchange for promises to deliver 2.9 billion Grams. Telegram intended the blockchain to connect with its messaging service, giving the project a potential distribution channel far larger than most token networks could claim.

The court treated the sale and distribution as one scheme

The Securities and Exchange Commission brought its case on October 11, 2019, alleging that Telegram and its TON Issuer subsidiary were conducting an unregistered offering. Telegram argued that the purchase agreements sold to sophisticated buyers were private placements and that later resales of functioning Grams on TON would be separate transactions.

Judge P. Kevin Castel rejected that separation at the preliminary-injunction stage. His March 24 opinion found that the SEC had shown a substantial likelihood of proving the 2018 sales, Telegram’s undertakings and expected public resales were one distribution under the investment-contract analysis associated with *SEC v. W.J. Howey Co.* The court concluded that the planned delivery to initial purchasers would complete an ongoing public distribution without a registration statement and prohibited that delivery.

That was a preliminary ruling, not a final trial judgment that every cryptocurrency was a security. The opinion emphasized the particular economic structure: initial purchasers were expected to resell Grams into a broader market, while Telegram’s work and planned integration were central to the network’s launch and perceived value.

Telegram stopped, but open-source code could continue

Durov’s May 12 statement said Telegram had worked on TON for two and a half years and had decided not to proceed. He also warned that projects using his name, Telegram’s brand or the TON abbreviation were not affiliated with the company. No present or former Telegram team member was involved in those efforts, he said.

The boundary is important. Telegram’s withdrawal ended the company-sponsored launch and its contemplated Gram distribution. It did not prove that the underlying code had disappeared or prevent independent developers from creating networks based on similar technology. Durov explicitly acknowledged that such networks might appear while saying Telegram was unlikely to support them.

His broader criticism of U.S. power over global finance and technology was a contemporaneous argument by Telegram’s founder, not a judicial finding. The verified legal record was narrower: the court enjoined Telegram’s planned delivery after evaluating the complete fundraising-and-distribution arrangement, and Telegram responded by abandoning its own path forward.

What May 12 established—and what it did not

May 12 established an attributable company decision, not a token-market event. Official Grams had not been delivered into the contemplated public market, so there was no defensible Gram closing price, trading volume or market capitalization to measure. Prices attached to unofficial instruments would not establish the value of Telegram’s planned token.

The decision also did not resolve investor repayments, penalties or the final disposition of the SEC case as of May 12. Those remained separate questions requiring later court or regulatory records. On the event date, the consequential fact was that a heavily funded, messaging-integrated blockchain project had reached an institutional stop: U.S. securities enforcement and a federal injunction had made Telegram unwilling to continue its own TON launch.