History of the collapse of the Telegram Open Network (TON) in investors ' eyes.
The investor in blockchain-platform Telegram Open Network (TON) Pavel Cherkashin in a column for Forbes tells how he first heard about the project, spent the night in the room, studying the documentation, and says that then went wrong.
Until recently, the project of Pavel Durov F 30, which promised to change the world financial system looked very attractive for investors, but ended with disappointment and loss. We also believe in the idea and the team, gathered up the syndicate with $20 million and participated in the placement. Now serving events ago, I'm trying to figure out what went wrong.
I remember the first time I heard about the project at the conference, Consumer Electronic Show in Las Vegas in January 2018. As a result, instead of walking through the exhibition, I spent the whole day in his room, studying the documentation and inquiries from friends.
the Revolution in the financial services
The project has captured me not only for its scale – at the time, thousands of startups have launched their own cryptocurrency, and the fact that he unlike the others was real and clear chance to change the global financial system. “it is Better to invest in such a project and lose in case of failure, than to miss a unique opportunity in the case of success and regret it all my life», – I thought. The reasoning was as follows.
Все больше людей в мире предпочитают работать на себя, благо интернет позволяет это делать из любой точки мира. Economy свободных работников (фрилансеров, консультантов и т. д.) насчитывает уже сотни миллионов человек и продолжает расти. Только в США их около 57 млн человек. Через десять лет не менее миллиарда человек будет работать вне государственных границ или корпоративных офисов, в интернет-среде. Между тем даже базовых финансовых инструментов для этой аудитории не существует. Простой банковский перевод сейчас стоит $20, а перевести 10 центов или доллар в принципе нереально. Заплатить небольшую сумму фрилансеру в Бангладеше в таких условиях практически невозможно.
Existing cryptocurrency such as bitcoin can in theory solve the problem, but they have their own difficulties, primarily high speculative exchange rate fluctuations and the lack of civilized means of integration into the banking system.
In 2017, the messenger of Pavel Durov Telegram has become the de facto environment for independent professionals, including libertarians of all stripes. Collecting delivered to an audience of millions (200 million users in March 2018, and at the end of April 2020, Durov announced on his blog already about 400 million users), he went on and offered the world a clear, simple concept of a civilized digital currency via a digital passport in the Telegram to ensure compliance with the requirements of Bank regulators to combat money laundering, with hundreds of millions of people get the opportunity to pay for goods and services without the extortionate fees.
«Here it is, the revolution in financial services, which for so long said in the community. Finally a man appeared, ready to challenge the rotten global financial system.” – could be heard everywhere. Through self-regulation, such a currency could replace the whole unwieldy banking system with its millions of clerks, billions overhead and efficiency of the first steam locomotives.
It seemed there was nothing that could go wrong. The actor left nothing to chance. He had the best technical team, support the most influential investors in the world, a growing audience of hundreds of millions of users and protection of the sharp-toothed lawyers wall street. Lawyers approved the actions of the team Durova and have not found anything that regulators can raise questions. And even if they occur, they decided that the company culture can pay a fine, as do other market participants, and to continue its operations. $1.7 billion investment automatically taken out his project in the category of “too big to fail”. Moreover, he was not even a pioneer. On the market have been hundreds of cryptocurrencies, many similar projects have made a successful ICO, including the company EOS, which has successfully sold their tokens for $4 billion, having received the tacit consent of the SEC.
Investors offered a well drafted with clear prospects to change the world for the better. Interest of investors to the project was unprecedented. To enable everyone in the syndicate had to limit the quota for participation.
We are well aware of the risks and warned them of all the participants. In the end, venture capital investments, all revolve around stories of very high risk, but a huge payout in case of success. Investing in one such project, it is difficult to win. 10 investing in such projects, it is difficult to lose.
the Jealousy of Zuckerberg
All went wrong in 2019 Happened policy, and it came from an unexpected quarter – through Facebook. Eyewitnesses say that Zuckerberg was furious when he learned about the successful ICO Telegram. Do Zuckerberg and Durov compete for a long time, and the involvement Durov $1.7 billion only exacerbated the dislike for him Zuckerberg: with these resources, the film could entice significant number of users and thus were a threat to his company.
In the depths of Facebook feverishly born on the Libra project, which was almost a complete copy of the TON, but with the nameplates of major corporations and the stamp Made in the U. S. A. After that Facebook openly came to us lawmakers with the feeling that doing a good job for America. The world, this project is definitely needed, but it needs to be done by an American company, on American soil, in accordance with American law. Instead of supporting a noble cause, American lawmakers have accused Zuckerberg and Facebook in an attempt to encroach on the most sacred – the U.S. dollar. Corporations, one after another began to distance itself from CryptoMemory. The project had a shame to freeze.
I watched the hearings on the Libra live. I am less interested in the success of Zuckerberg, but very worried about the mood of U.S. legislators in the context of the industry of digital currencies in General and the TON project in particular. Senators rushed through populist slogans and demonstrated not only misunderstanding the problem, but also a complete disregard for her. For example, in the words of Mark that the new currency will help the poor to do micropayments, they shouted: “If Facebook cared about the poor, it would take more work to minorities! Why do you have so few of them? Silent? I know! Because under the pretext you want to make currency for drug dealers!»
What happened next, there is a high degree of probability, knowing used in such cases, rhetoric. Zuckerberg said: you're not allowed to do my payment system, but allowed Durova, which may be associated with the Russian government and other unfriendly structures configured and makes its project in the United States on the money of American investors, and his ultimate goal – to create a currency that will compete with the dollar and thereby jeopardize the American economy. And with this formulation the issue of creating Durov its platform came out of the economic plane and moved into the plane of national security.
In the result of the intervention of external forces emerged a precedent when a U.S. judge prohibits the launch of a technology product, even outside the US, using arguments similar to those used in the Russian court in czars: a platform is created for making money company Durova and investors, and this is unacceptable. The two-year epopee of building an alternative global economy ran into a concrete wall and the state bureaucracy is beginning to crumble on the eyes.
“We voted for the delay»
The situation is regarded as a factor of force majeure, force majeure. About her team TON warned investors in the original prospectus. Moreover, at the end of 2019, after the first restraining order, the actor had requested the investors support and got it in the form of a deferral of the launch of the network for 6 months – up to 30 April 2020. Without the consent of the investors, the project would be in default and would be forced to close. I suspect that the SEC strategy was directed toward it.
We voted for the delay. I tried to convince investors that the actor knows what he's doing, and needs to find a way out. For us it's just the financial risk. For him – his life, a chance to make history, to change the world. In the battle of a billion people for their right to make an honest living and pay online against a hidebound mentality of power, I put their money and reputation on entrepreneurial talent of Pavel Durov. Moreover, I am convinced many good people to follow me. The chance was worth it.
The most likely scenario seemed a settlement agreement with the SEC, the payment of a large fine or at least run the project outside of the United States. Room for maneuver was still quite large, but it rapidly tapers as it approaches 30 April 2020. To this day, was to be taken the final decision on the fate of the project.
To negotiate with the SEC failed. I don't know why, but I assume that this was due to the installation of American power, not the stupidity of the lawyers or of the intractability of Paul.
On the eve of 30 April 2020 Durov had three options:
To forget for some time about their ambitions and meet the expectations of the market and investors to transform a Telegram in the Corporation, to assess it, for example, $10 billion, to distribute to the investors shares without the right to vote in $1.7 billion, thus giving them a portion of the economic value of the Telegram in exchange for investments and losses incurred.
Go to fight with the American justice system for the benefit of society. Maybe in the end, the film would have been "crucified”, but he would have been crucified as a hero of his time.
Do nothing and allow the project to fall apart, and all assets created by the money of investors to withdraw through friendly company and restart under a new name, stating that the new project has nothing to Durov, Telegram no.
Investors hoped for scenario No. 1 (incorporation) as most economically feasible. They would have supported a crusade against American justice. Technology startups are not the first to test the limits of tolerance of the laws, suffice it to recall the Airbnb or Uber, which are still doing it. What they were not ready, it's the fact that in the end, Durov will leave them shouting “every man for himself!” and release Free TON, once again using the exhaust with «Vkontakte» welcome.
“the Public turned a blind eye”
Paul began to develop Telegram, working in «Vkontakte». Then he ignored the claims of the shareholder «Vkontakte» UCP is that it uses the resources of the company from outside the project, called employees of the Fund «masters racketeers" and accused them that they interfere with the work of the team «Vkontakte».
During the history of «Vkontakte» and create a Durov Telegram generally perceived as the injured party, the owner who was able to confront the evil and powerful system. The public turned a blind eye to pop-up here and there stories and revelations to refute his words. This pattern of behavior worked then may work now, only now, instead of a totalitarian Russian power extreme is the “police” the US government and greedy investors, speculators.
Report to the regulator under trial for two years the team Durova spent a TON on development and operation of the messenger $405 million All of the money eventually resorbed assets Durov. The bulk of the funds went to the maintenance and development of Telegram, and not on the development of blockchain TON, as it is not monetized and is dependent on infusions Durov. How to use TON Free whether to integrate with Telegram – unknown. But investors in any case have lost almost half a billion without receiving any digital currency or a share in the messenger, despite the fact that these designs were made on their money (Durov offered investors a TON from the US the only option of a refund – 72% of the original investment in cash. – Forbes).
As the legal examination is not completed, it is difficult to speak about any concrete action at this stage. Most likely in this situation there are at least several investors who want to sue, and as soon as they submit the first claims – catch up with the rest, not to be left behind. Lawyers, bloodthirsty, has already terminated phones, offering their services. In case of prolonged and complicated litigation will benefit only the lawyers.
Call me a hopeless optimist, but I still hope that Pavel Durov will come up with some ingenious way to rectify the situation. For example, still come back to scenario No. 1: Telegram incorporates, let go of the investors repay the debt and still kick ass Zuckerberg. You don't want to go down in history as the man who mobilized on his fight for hundreds of millions of people, and then ran at the first shots on my yacht.
the author's Profile on the social network: https://smart-lab.ru/profile/Marek/
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