24 Oct 2019
It seems that Telegram may not be coming out from its problems anytime soon, as court postpones hearings on the company’s TON blockchain till February next year. A court in New York, which should host the hearing to determine that security status of the coins, has shifted it till the 18th and 9th of February, 2020.
Telegram has been trying to make sure the TON blockchain is available to the public on time. But in a series of cases filed against the company by SEC, everything has to follow due process before the token will be available. SEC filed the case to determine whether to treat the coins as a security or not.
SEC’s stance on the case has drawn the interest from the judge, who has asked Telegram to suspend issuing its token until it gets approval after the case.
The court had ordered Telegram not to issue, sell, or offer its coins to the public, pending when the court has concluded the hearing. The court further stated the court should communicate Telegram if there is any change to this order.
Because of that, Telegram is expected to wait longer before it can issue its token to the public. Already, investors' patience is beginning to weigh down, and the company could be facing more pressure from the public as the case lingers.
The court further warned that the parties involved in the lawsuit must not conceal, alter, or destroy any records or documents that are relevant to allegations. The court mentioned that it would take relevant actions against anyone found guilty of these actions.
With this statement, it further constricts any loophole Telegram want to explore during the hearing. More importantly, it shows that the government has not yet embraced blockchain technology, and it does not trust the system just yet. It also shows that there is a long road ahead for blockchain technology before the mainstream would completely accept it. Right now, the major challenge of the crypto company lies in the fact that some big financial players have not yet registered their interest.
To many observers, the statement by the judge seems to be too harsh on Telegram. Asides the impact it will have on Telegram’s reputation, it will further discourage other new crypto investors from entering the market. That is the reality and the implication of the latest postponement.
Apart from mistrust, there may be other reasons why the court has taken this decision. SEC has not been straightforward when it comes to dealings with cryptocurrency organizations and their tokens. Another reason is the competition between WhatsApp and Telegram. Of course, WhatsApp is a homegrown company; the court could make decisions to favor them.
Despite all these challenges, Telegram is still keeping a positive outlook. The management of the company has informed investors that it will return 70% of investors' funds if the ruling of the court is against their favor.
However, according to reports, the Force Majeure clause recently included in the clause could make the refund very difficult. It is a battle Telegram desperately needs to win. Otherwise, it will be very difficult to convince investors whenever there is another offer. As it stands, investors and the public are waiting for both parties eagerly to resolve this issue.
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