In fact, Telegram Open Network could be started originally

When wu tai was contacted, he was preparing the copy of the community announcement. This is probably the last time the community will make an announcement about the TON project.

Earlier on May 13th Pavel Durov, the founder of Telegram Open Network (TON), posted a letter entitled "what is TON and why it failed", admitting that the top-class project, which had raised $1.7 billion, was dead in the water.

Wu tai is the initiator of TON Chinese community and has also participated in TON private placement. In January and March 2018, TON conducted two rounds of private placements, raising $1.7 billion from 175 private investors. This level of private equity can almost take the lead in the private financing of any project in any circle. At that time, the one-year financing of EOS was not yet completed, and the second financing amount was $230 million of Tezos, while the financing amount of TON was 7 times that of the second.

Until Pavel's letter, wu tai and the Chinese community had been trying to figure out how to start TON, but he didn't expect Pavel to suddenly give up on TON. "It affected me a lot."

We are actually quite concerned about the issue of refund. It is known that some private investors have received the refund, and the refund rate is 72%. We do not know whether all private investors have received the refund rate of 72%. Hash CIB is one of 175 private equity partners, according to Sandro, a partner at Hash CIB.

Read Pavel letter friend should regrets, is the end of the blood and sighed for all of this project is full of regret, "I wish all strive for decentralized, people pursuing equality of good luck, this battle is likely to be our generation is the most important, is also the most valuable battle, we fail, I hope you will be successful." When we see such an end, we can see Pavel Durov's tough guy image. He used to confront the Russian government and refused the Russian government's request for encrypted chat app Telegram without any words. He was frequently troubled by the Russian government.

Therefore, when the news of TON's failure was fermented with high hopes, people were more regretful.

But as we talked, they had another thought: Pavel is no longer the spiritual leader he once was.

TON actually had a way to get started

Six months ago, Mr. TON, who had kept a relatively low profile, was suddenly sued by the securities and exchange commission for violating securities laws. Subsequently, the TON team and the SEC began to deal with the news of the frequent output.

"TON hired some of the best lawyers in New York." Mr Ng told BlockBeats that, in his opinion, the main cause of TON's death was the Howey's Test.

The Howe test is used to determine whether a particular protocol constitutes a security. It consists of four conditions:

1, is the investment of money;

2. Expected benefits of the investment;

3. The investment is for a specific cause;

4. The interest arises from the efforts of the issuer or a third party.

In view of the above four conditions, the SEC determines that the GRAM of TON is a security. We don't know exactly how TON dealt with the SEC. We can only venture to guess that the SEC is biting its tongue and disapproving of TON's offering to U.S. investors.

But TON has other options.

"He has the option of only returning the money to American investors, and even our community has developed a TON startup that will help them get around regulation." Wu Tai said.

According to wu tai's plan, a chain will be spontaneously started in the community, and when it is started, it will be donated to TON, which they hope will help the authorities in this way. It was a work in progress, but it ended when Pavel gave up.

Of all the options, Pavel chose the undersign, "there will be no reversal." Wu Tai said.

The abandonment, according to Sandro, was a sign that the team wasn't paying attention to TON. "it was obvious," he said.

"TON's goal may be to develop Telegram." In other words, the TON project may be more like a tool for Telegram financing. The logical support of Sandro is that, with the addition of TON, the number of Telegram users increased by 60% last year to reach 400 million users worldwide.

However, with the development of the situation, the price of using TON was getting higher and higher, which was far beyond Pavel's expectation, so he chose to give up TON. When commenting on TON's relationship with Telegram, Sandro used the word "smart." "it was very smart of them to raise money for Telegram in this way, without the loss of equity, and with such a large amount of money."

From their recollections, we suspect that Pavel's thinking might have been this: after the SEC suit, Pavel hired his best lawyer to mediate, but he found that the main cost of the affair was not money, but something else. TON was abandoned as a tool for financing and development of Telegram. This time, he did not choose a positive regulatory agency or other alternative solutions. Maybe in order to keep Telegram, or for other reasons, he gave up this time. He tried hard to operate Telegram when its IP address was banned in Russia, and he did not give up even though he was troubled by the government. However, he gave up this time.

Of course, this is only based on some information, not necessarily Pavel's true thoughts, but in a way, we can say that TON is dead, and Pavel may have been "dead".

"The reason TON was founded is the reason it's terminated today. Irony." This is the final summary of the TON that wu tai has paid full attention to himself for two years.

Thinking about regulation

The $1.7 billion top-tier program was aborted by regulation, which has implications for other programs.

I think the biggest concern brought by TON is whether regulation is a necessary option for future blockchain projects.

The compliance program is not non-existent. Blockstack complies with SEC regulation and is compliant. Top projects such as Algorand and Filecoin are published on the Coinlist and are also compliant. But the vast majority of these projects are not approved by the SEC.

But the case of TON tells us that once the project is denied by the regulatory authorities, not only the project will be cold, but also the investment money can not be fully returned. Although compliance is a trend, if there is no compliance in the project, it will lead to investors' loss. Will compliance be a mandatory option for future projects?

Mable Jiang, executive director of Multicoin Capital, says it has to do with the volume of project financing.

She argues that the cost of compliance would be high, if not for the huge sums involved. Correspondingly, SEC also has management costs, which can't be managed if the volume is too small. If the project itself has a good cash flow, there is no need to seek financing from compliance investors, and it may not be compliant from the beginning. It may wait until the volume is completed, and then consider the appeal in this aspect.

In any case, the TON incident is a symbol of the blockchain project, indicating that the centralized regulatory agency will officially influence the decentralized blockchain project. This trend is irreversible, and the top American project with a large amount of new financing cannot be without the compliance element, otherwise it will be the next TON.

Of course, what about the next Pavel?

Wu tai's TON Chinese community bulletin was changed several times, and finally condensed into 6 points, stating the facts and expressing the attitude. At the end of this announcement, we feel sorry for the TON project that we once expected. We feel sorry that Pavel Durov is no longer what he used to be. We also feel sorry for the efforts of all the people who have been working for the TON project for two years.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia