[HN Gopher] What Was TON And Why It Is Over
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What Was TON And Why It Is Over
Author : amaccuish
Score : 156 points
Date : 2020-05-12 16:52 UTC (2 hours ago)
(HTM) web link (telegra.ph)
(TXT) w3m dump (telegra.ph)
| mintplant wrote:
| Eleven paragraphs to say, "I'm taking my ball and going home!"
|
| When the SEC shuts down your unregistered securities offering,
| saying you saw the project as a literal gold mine is maybe a poor
| choice of analogy.
| red_admiral wrote:
| > Unfortunately, we - the 96% of the world's population living
| elsewhere - are dependent on decision makers elected by the 4%
| living in the US.
|
| Calling your bluff on this one. Other world powers are available
| if that's really your argument.
|
| It turns out that if you want customers in the US, then yes you
| have to follow US law.
| imglorp wrote:
| This seems like one of those situations where the world
| benefits from one country doing the homework and moving to
| protect its citizens. I mean, if another country wants to okay
| pump and dump scam coins, or bogus medicine, or unsafe cars,
| they're free to do that. Otherwise, others might as well
| benefit from SEC, FDA, and NHTSA results unless overridden
| locally, no? Sure, US agencies not perfect, captured even
| sometimes, but pretty sure tiny Elbonia doesn't have the
| resources to vet securities, drugs, or cars.
| macspoofing wrote:
| Is KiK still fighting SEC? This can't be good news for them as
| well.
| Animats wrote:
| What do they have to hide?
|
| Filing for a US initial public offering requires much writing and
| some audits, but it's not inherently difficult. Thousands of
| marginal companies have done IPOs. That's where penny stocks come
| from. The SEC doesn't evaluate your business model. All they
| insist is that _you don 't lie._
|
| Now, if you want to list on an exchange, have your IPO
| underwritten by a major financial firm, and get institutional
| investors to buy your stock, there's more to do. But those aren't
| SEC requirements. You can IPO without them and peddle your own
| shares.
|
| [1] https://www.sec.gov/rules/other/2018/34-83723.pdf
| hitekker wrote:
| The opening image looks like the start of a scam:
| https://telegra.ph/file/c6f281b62b5909d0c5bad.png
|
| Group of faceless people against a scenic vista, arms around and
| supporting each other, under the flag of the "product", facing a
| gold mine that apparently self-produces gold and a sun that just
| so happens to be shining light on all that wonderful gold... with
| a dog(?) chasing a golden butterfly.
|
| I've never used telegram before but I think the CEO should
| distance himself a bit more.
| AnonC wrote:
| I wonder how Telegram will subsist and how it's going to generate
| money for the longer term.
|
| Since it stores all messages and media by default (except secret
| chats) on its cloud, the infrastructure costs will keep going up
| at some pace with time.
|
| It was only a few weeks ago that Telegram announced that it has
| 400 million monthly active users.
|
| How long can Pavel Durov's wealth keep it alive and how much of
| his wealth will he continue to commit to the platform as time
| passes? The platform is surely synonymous with him (at least from
| his perspective), and there are millions of people who need it
| and trust it (it's the only app that large groups of protestors
| in Hong Kong could safely use).
| eitland wrote:
| As a long time Telegram fan - albeit less than before - I'm happy
| to see this go:
|
| Why do everyone have to try to create another blockchain?
|
| Why can't companies just be honest enough to either name a price
| up front or make a freemium model or something?
|
| Hopefully this will cause them to reconsider payments like old
| WhatsApp or something else that aligns with the interests of the
| users?
|
| Edit: add second part of a broken sentence. Also: the niche that
| WhatsApp used to hold (paid, reasonable price, good ux, no ads or
| spying) still isn't too crowded.
|
| Signal is important and I am happy to recommend it but there's a
| lot of room still for others who want to enter the small
| communities/group-of-friends messaging space. The best
| alternatives I have found so far are: MeWe (pretty close to
| Google+, but with a business model that isn't based on selling
| data or ads), Telegram and of course still WhatsApp if you can
| stomach it.
| wmf wrote:
| The Durov brothers got screwed by the Russian government so I
| can imagine why unregulated money appeals to them. If they
| created some kind of PayPal 3.0 in their minds they would
| probably just be waiting to be robbed by some government(s).
| some_furry wrote:
| This was inevitable after the SEC got involved.
| shattl wrote:
| It looks as if Durov wants to distance himself and Telegram from
| the cryptocurrency subproject, in connection with the latest
| claims of regulatory authorities.
| speedgoose wrote:
| This is good for the environment.
| wmf wrote:
| Wasn't TON using proof of stake?
| junaru wrote:
| > blockchain platform called TON and a cryptocurrency we were
| going to name Gram
|
| And no one in marketing said anything about naming your platform
| and curency after units of mass. How come no one raised the SEO
| issue?
| wmf wrote:
| Telegram has hundreds of millions of existing users; they don't
| need SEO.
| floatingatoll wrote:
| Previously: "SEC halts Telegram's $1.7B token offering" (7 months
| ago, 201 comments): https://news.ycombinator.com/item?id=21228415
|
| _"We allege that the defendants have failed to provide investors
| with information regarding Grams and Telegram's business
| operations, financial condition, risk factors, and management
| that the securities laws require."_
|
| _"Telegram seeks to obtain the benefits of a public offering
| without complying with the long-established disclosure
| responsibilities designed to protect the investing public."_
| tw04 wrote:
| His analogy is pretty poor IMO. A more realistic analogy is:
| imagine if a group of people got together and bought a plot of
| land to mine gold. Then imagine these people told all of their
| friends that they had a gold mine and were willing to split the
| output of the gold mine with all of their friends for just
| $10k/piece.
|
| Now imagine the government said: hey, you don't even know if
| there's gold on that land, but you're promising your investors
| that there is. And not only are they telling us we can't sell
| part of our non-existent gold to our friends, we can't sell it to
| people ANYWHERE.
|
| Sound completely unfair? Government overstep? We aren't allowed
| to sell people something that doesn't exist?
| centimeter wrote:
| You're describing "prospecting", or (less charitably)
| "wildcatting", which is a legitimate business.
|
| > We aren't allowed to sell people something that doesn't
| exist?
|
| You're allowed to sell rights to things that might exist in the
| future.
|
| If someone puts a ton of money into something stupid that's
| pretty clearly not going to pay off proportional to the
| expense, that's on them.
|
| > you're promising your investors [a return]
|
| This is somewhat different from your first paragraph.
| Overselling your confidence in the financial outcome of a bet
| is (usually obvious) fraud, but that's a different problem from
| selling a stake in a risky endeavor.
|
| Not defending Telegram's stupid shitcoin, but trying to get the
| Government to stop this (whatever your probably loosely-held
| idea of "this" is) is probably not a good idea.
| cafard wrote:
| https://en.wikipedia.org/wiki/Bre-X
| shawndrost wrote:
| And now we have come full circle. The government does indeed
| permit wildcatting or prospecting, but it requires that all
| investors are accredited. The same is true for TON and other
| bitcoins -- the govt is not trying to forbid them, but merely
| require the normal level of investor vetting that is in place
| across the rest of the economy.
| centimeter wrote:
| "Other bitcoins" doesn't parse - did you mean "other
| shitcoins"? Bitcoin is a specific product, and shitcoins
| are a disjoint category.
|
| The "accredited investor" category is mostly a subsidy of
| rich people. Exclude peasants from investing in the good
| high-return stuff and you can demand higher capital
| premiums.
| anticensor wrote:
| It is called the _futures and promises_ market.
| simonh wrote:
| Which has established rules and contracts guaranteeing and
| enforcing the rights of buyers and obligations of sellers.
| saurik wrote:
| The "anywhere" thing is weird though as these people don't live
| in the United States, so the analogy is that you are a Russian
| citizen living in Europe and you buy a plot of land; now, the
| US government tells you you aren't allowed to tell people in
| Europe that you maybe have a gold mine and maybe they should
| invest in shares of your gold, because, in the case that you do
| find gold, someone in the United States might one day buy some
| of it, which is actually kind of ridiculous on not just one but
| two levels: that the US has jurisdiction over your behavior at
| all when you aren't yourself a US citizen, you don't live in
| the US, and you aren't even dealing with other US citizens,
| because theoretically the people you deal with might one day
| themselves deal with US citizens (which is an analysis I am
| just believing from this article: I haven't read the actual
| complaints from the SEC); but also the very idea that the US
| thinks that the shares of future gold that may or may not exist
| might _still_ be a security even after you find the gold
| (assuming you map it out and know how much exists after you
| find it, which I think is a reasonable analogy for a post-
| launch distributed protocol project) because of this weird
| theory that they sometimes have that "once a security always a
| security" (which is based on some context I have outside of
| this article).
| vorpalhex wrote:
| That's not quite right. Imagine you're a Russian citizen
| living in Russia proper, and you want to sell prospective
| stakes. Russia rules that you can't do this because you're
| not accredited, and you're asking people to buy a kind of
| security.
|
| You then ask if you can sell your security to people in the
| UK. Russia repeats itself, more slowly this time: No, you're
| not accredited and you're trying to sell a security - stop
| it.
|
| So then you explain, "but this isn't just a security, it's a
| decentralized open security based on cryptographic principles
| and new technologies and there's computers involved!"
|
| And then Russia repeats itself once more, "No, you're not
| accredited, it's still a security, what part of this is hard
| to understand?"
| saurik wrote:
| I feel like our disagreement here is based on a different
| understanding of a fact that I might legitimately have
| wrong: my understanding is that the owners of Telegram are
| literally Russian citizens living in Europe; are they
| actually US citizens? (FWIW, a quick re-check of Wikipedia
| to verify my memory here is definitely making it sound like
| the Durov brothers are Russian nationals, but maybe they
| have now become official citizens of an island in the
| Caribbean as part of their "self-exile"? I don't think that
| Saint Kitts and Nevis is a US territory, though.)
| vmception wrote:
| > And not only are they telling us we can't sell part of our
| non-existent gold to our friends, we can't sell it to people
| ANYWHERE.
|
| well they could, they'd just have to register with the
| government.
|
| but in this case, registering with the government isn't so
| simple because that "opts in" to a ton of other regulations
| which are usually okay, if the group of people weren't also
| trying to tie membership into their nightclub with whoever
| currently bears the right to own a piece of the gold mine. Now
| the regulations for investments are completely incompatible
| with general merchant services, regulations for consumer goods.
|
| The various governments have a chance to create a framework
| that works for both, but chooses to rely on the regulator for
| investments exclusively, or making it too expensive and
| irreconcilable to ask for clarification.
| tomc1985 wrote:
| > We aren't allowed to sell people something that doesn't
| exist?
|
| Seems reasonable to me
| egorf wrote:
| They are basically blocking USD competitors. This makes a lot of
| sense, doesn't it?
|
| Update: The SEC statement makes more sense than my original
| comment :)
| wmf wrote:
| Or you could say they are blocking obvious pump-and-dumps.
| nikivi wrote:
| Libra is allowed to exist though. Or I suppose it doesn't
| compete with USD as it will be tied to fiat?
| egorf wrote:
| This is only my guess, but it should be so much easier to
| control and regulate Facebook's product rather than
| Telegram's, right?
| Yizahi wrote:
| People unhappy with USD can always use USDT, opportunistically
| printed in hundred million "dollars" equivalent per month by 3
| semi-anonymous guys in non-extradition offshore and which was
| dropped like a hot potato by the only auditor company who even
| considered auditing this scam. There is only one small flaw in
| this plan - for some weird reason not many people are rushing
| to adopt this toilet paper "currency".
| pavlov wrote:
| Well, those billions of fake dollars are being used to buy
| Bitcoin, which props up its price, which attracts excited
| retail investors to buy Bitcoin -- so in fact people are
| rushing to buy the USDT toilet paper, they just don't know
| it.
| jokit wrote:
| It does from a short sighted, tyrannical, perspective.
| egorf wrote:
| It's not like I'm defending them. Just trying to understand
| the real reasoning behind this decision.
| lalaland1125 wrote:
| I highly recommend that you read the original SEC
| complaint. It lays out the reasoning quite clearly.
| heliodor wrote:
| Admins, please fix this clickbait title. Compare to the
| TechCrunch story that's titled "Telegram abandons its TON
| blockchain platform".
| codewithcheese wrote:
| OK so they built this great blockchain and you can't continue but
| where is the link to the source?
|
| [0] https://test.ton.org/
| lalaland1125 wrote:
| I highly recommend that people read the full SEC complaint:
| https://www.sec.gov/litigation/complaints/2019/comp-pr2019-2...
|
| It's pretty obvious that Telegram was simply planning to pump and
| then dump a bunch of worthless tokens on retail investors.
| femto113 wrote:
| Even if you believe Telegram was competent and well intentioned
| the SEC's argument here seems clear and reasonable:
|
| _Grams are securities because the Initial Purchasers and
| subsequent investors expect to profit from Telegram's work ...
| Grams are not a currency because, among other things, there are
| not any products or services that can be purchased with Grams._
| ashtonkem wrote:
| That's the norm with ICOs, I don't know why anyone is shocked
| by that anymore.
| thefounder wrote:
| Maybe I don't get it but the gov didn't ban TON. It banned the
| sale of said tokens. Nothing stops them from further developing
| the tech with VC money.
| wmf wrote:
| That's how you know it's not about the technology; it's all
| about getting rich quick. Once that has been taken away they
| lost interest in developing TON.
| schmichael wrote:
| I think it's safe to say that without fungible tokens (Grams),
| the blockchain itself (TON) isn't very interesting (despite
| what they want you to believe).
| chris_engel wrote:
| So... why not just leave that feature out of the US versions in
| the app store and everything is fine. Or am I missing something?
| sub7 wrote:
| Just wait until governments actually start attacking
| cryptocurrencies. They're dumb and slow but when they finally
| catch on, the game is up.
|
| All these stupid glorified link lists have never been backed by
| anything other than speculation and eventually market forces will
| always win.
| rwmj wrote:
| I've found David Gerard's periodic updates to be useful (on this
| and other cryptocurrency nonsense/scams/etc). His latest one
| about Telegram is:
| https://davidgerard.co.uk/blockchain/2020/04/14/news-cooking...
| Link to the "telegram" tag on his blog:
| https://davidgerard.co.uk/blockchain/tag/telegram/
| tomc1985 wrote:
| The graphic at the top and the first few paragraphs come off as
| extremely patronizing, if not propagandistic. Then he goes off on
| a rant about sovereignty to cover for TON's lack of legitimacy.
|
| Not a good look for Telegram, and good riddance to TON. I realize
| this blockchain garbage is probably never going to die but it is
| good to see the real world doing what it does best.
| beckingz wrote:
| So do people get refunds...?
| wmf wrote:
| Yes, there will be partial refunds.
| shattl wrote:
| What does "partial" mean? Will investors sue him?
| nurettin wrote:
| Do people who get scammed in telegram's fakecoin get-rich-quick
| IPO channels deserve refunds, let alone any funds at all?
| [deleted]
| ascendantlogic wrote:
| this is a disingenuous post. The crux of the SEC effort against
| them is because they created this chain and token during the 2017
| gold rush (actually in 2018 but obviously the 2017 bull run is
| what sparked the interest) and very clearly were trying to cash
| in. When you create what by all accounts is a security
| specifically for investment and asset appreciation but don't
| register it as a security with the SEC, they get a little
| unhappy. Reading back through some of the articles before this
| when the SEC intervened Telegram had raised 1.7 billion dollars
| off this. When you make a few billion off an unregistered
| security offering, people are going to sit up and take notice.
|
| Regardless of your feelings on the SEC, crypto, et al, it's
| pretty obvious why the SEC intervened and to see this eventual
| outcome.
| jrochkind1 wrote:
| > Reading back through some of the articles before this when
| the SEC intervened Telegram had raised 1.7 billion dollars off
| this.
|
| I think I understand the "more in sadness than in anger" tone
| of the post better now too. They did fine for themselves didn't
| they.
| wmf wrote:
| Not really. They have to return $1.2B (either in cash or
| equity) and their burn rate is high. Now they have to find a
| new business model before the runway runs out.
| jandrese wrote:
| So they get to keep half a billion and never had to offer
| anything of value?
| ConsiderCrying wrote:
| They have to return the investments though,so I wouldn't say
| they "did fine". Back at square one, having spent a couple of
| years on a project.
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