Telegram races to ship its coin

More than a¬†year ago, Telegram sold a staggering $1.7¬†billion¬†worth of pre-sales for its cryptocurrency, Gram tokens. Pitched in a waffling, jargon-filled document, the Telegram Open Network (TON) promised to be a public blockchain, with everything from file storage to an actual currency‚ÄĒand investors clamored for a piece of it.

Fast-forward to now, and The New York Times is reporting that the clock is ticking on the coin, which the company promised would arrive before October 31, otherwise it would return all of the money:

Telegram promised in legal documents that it would deliver Grams to investors by Oct. 31, 2019, or give back the money. The company is now racing to get the coins out before that deadline. [...]

Facebook’s Libra is meant to be backed up by traditional currencies held in bank accounts, in order to stabilize the value of the digital coin. The Gram, in contrast, will be backed by nothing and gain or lose its value, like Bitcoin, by whatever someone is willing to pay for it.

So, with the deadline looming, Telegram apparently expects to soon send out its first coins‚ÄĒbut hasn't involved the government or regulators in any country. It appears to plan to throw the coin out into the world, like with Bitcoin, and claim it has no control over it, but that's unlikely to go down well.

That didn't go well for Facebook when it provided just a peek at Libra, and regulators are now breathing down the company's neck. Telegram is technically based out of Berlin, Germany, which would technically make it subject to European Regulation... but with just over 60 days left, it seems like it hopes to dodge regulators altogether.

The question, then, is what regulators could actually do about it launching a wild-west cryptocurrency. When Russia and Iran decided to try and ban the service last year, they struggled to take it down, as the company was adept at morphing its infrastructure to circumvent such bans. 

A¬†digital currency, however, prevents a different risk: invisible transactions, unaudited by the traditional financial system, have been traditionally enjoyed by those selling illegal goods and services. It's likely regulators will go after the methods used to get money¬†in and out¬†of Gram‚ÄĒpayment processors‚ÄĒwhich would be subject to the strict Know Your Customer (KYC) and money laundering laws.

If Gram were cut off at the actual currency exchange source, it would be rather worthless, and it hasn't got long to solve this problem, lest it find itself pissing off entire continents at the end of October, then needing to refund billions of dollars that have presumably been burned already.


Tab Dump

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