The TON Project & SEC Settlement (2018–2020)

25.1 The Telegram Open Network (TON) and 2018 Token Offering

In 2017–2018, Telegram conceived the Telegram Open Network (TON), an ambitious blockchain project designed to support high-throughput decentralized applications, payments, and smart contracts, powered by a native cryptocurrency called Gram. Nikolai Durov authored the comprehensive mathematical and architectural whitepapers for the project.

In early 2018, Telegram conducted a private token sale to accredited and institutional investors, raising approximately $1.7 billion to fund the development of the blockchain infrastructure and support Telegram's long-term operations.

   [2018]  Telegram raises $1.7B in private Gram token offering
   [2019]  US SEC files lawsuit alleging unregistered securities offering; obtains injunction
   [2020]  US Federal Court grants preliminary injunction barring Gram delivery
   [May 2020] Durov announces end of Telegram's active involvement in the project
   [Jun 2020] Court-approved SEC settlement ($1.2B returned to investors, $18.5M civil penalty)
   [Post-2020] Open-source community continues development as 'The Open Network' (TON)

25.2 SEC Litigation and 2020 Court Settlement

In October 2019, shortly before the scheduled launch of the network, the US Securities and Exchange Commission (SEC) filed an emergency enforcement action and obtained a temporary restraining order. The SEC alleged that Telegram's Gram offering violated U.S. securities registration requirements, and the federal court granted a preliminary injunction in March 2020 before the parties reached a settlement.

In May 2020, Pavel Durov publicly announced that Telegram was terminating its active involvement with the project. In June 2020, Telegram entered into a court-approved consent judgment with the SEC, agreeing to return over $1.2 billion to investors and pay an $18.5 million civil penalty without admitting or denying the allegations.

25.3 Independent Evolution: 'The Open Network'

Following Telegram's withdrawal, the open-source codebase was maintained and expanded by independent developer communities. Over time, the project evolved into **The Open Network (TON)**, which Telegram subsequently embraced as an independent decentralized ecosystem for features like Fragment and Mini App payments.

The TON Blockchain Architecture and SEC Settlement

Schematic showing the multi-blockchain design of TON and the transition from the original Gram project to independent community development.