Telegram founder and CEO Pavel Durov
Telegram founder and CEO Pavel Durov delivers his keynote conference during day two of the Mobile World Congress at the Fira Gran Via complex in Barcelona, Spain on February 23, 2016. Manuel Blondeau/AOP.Press/Corbis

Messaging app Telegram has withdrawn its appeal over the U.S. federal court’s decision to forbid the distribution of its Gram token, effectively giving up on its TON plans.

According to court documents filed on 22 May, the messaging app provider will no longer fight the ban on its blockchain project, stating that the Telegram has “filed a stipulation withdrawing this appeal pursuant to Local Rule 42.1.”. Filed with the U.S. Court of Appeals for the Second Circuit, the document is an agreement for dismissal of the case without prejudice, meaning the case is now over.

The project, which raised around $1.7 billion in a private token sale in 2018, intended to create a blockchain platform called the Telegram Open Network (TON). The platform would have facilitated payments through its native Gram tokens, and would have supported decentralized applications at high scalability levels.

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The project eventually drew the attention of the U.S. Securities and Exhcnage Commission, which hit Telegram with a lawsuit in October 2019, alleging that the company violated U.S. securities law by holding an unregistered security sale. After several long months of written arguments from both sides, a U.S. Federal District Court decided to grant an injunction against Telegram on 24 March, barring the company from issuing tokens to investors.

As the SEC lawsuit hit Telegram only days before TON’s launch, the company was forced to delay the release of its project in late October 2019. In April 2020, because of the injunction, Telegram wanted to once again delay the project, but this time gave investors a choice – either take a 72% immediate refund, or stick with the project for one more year, and receive 110% of the investment back.

A couple of weeks after the proposal was made, the firm’s CEO, Pavel Durov, announced in a blog post that his company will discontinue its efforts on the blockchain project, and will no longer be involved with TON in any way.

At the time, he wrote:

“The US court declared that Grams couldn’t be distributed not only in the United States, but globally. Why? Because, it said, a US citizen might find some way of accessing the TON platform after it launched. So, to prevent this, Grams shouldn’t be allowed to be distributed anywhere in the world – even if every other country on the planet seemed to be perfectly fine with TON.”

Though the official TON project is now dead, its code has already been published on GitHub, as it was open source. With that said, earlier this month a group of validators launched a forked version of the blockchain, called Free TON. The community behind the project has already launched three separate community contests aimed at strengthening the network’s power.

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