Telegram’s ambitious plan to hold onto investor money and repay them later in Grams has fallen apart. After realizing that regulators probably wouldn’t be happy with their plan to pay back investors in the controversial token, the company has revised their offer.
Due to contractual obligations, since Telegram failed to launch their Gram token by an April 30 launch deadline, they must pay back investors 72% of their investments immediately. Last week, the company suggested that if investors were happy to leave their full investment with the company, they could pay them back after April 30, 2021, their new expected launch date, in “Grams or potentially another cryptocurrency on the same terms as those in their original Purchase Agreements.”
That plan has now also fallen apart. “Unfortunately, based on more recent discussions with relevant authorities and our counsel, we have made the difficult decision not to pursue an option involving grams or another cryptocurrency due to its uncertain reception from the relevant regulators,” a letter to investors states, according to reports.
Under scrutiny from the Securities and Exchange Commission [SEC], Telegram will now pay out their American customers 72% of their investment. But for non-U.S. investors, a new offer has emerged. Those willing to stay with the project can receive 110% on their investment in 2021 in fiat. “This offer is only being made available to offerees outside the United States who are not U.S. persons within the meaning of Regulation S under the U.S. Securities Act of 1933,” Telegram wrote.
Investors must reply to the letter by 5:00 pm BST (12:00 pm ET) on Tuesday, May 5, to indicate whether they are located in the U.S. “We intend to ask you to return signed documents in relation to this new transaction by Monday, May 11, 2020, so we need your initial response to this email as soon as possible,” the letter ends.
Telegram looks like its losing its battle against the SEC. In April, Judge P. Kevin Castel ruled that the regulator is likely correct that the company was offering an unregistered security, and barred them from rewarding investors with grams anywhere in the world. It would take a miracle at this point for Telegram to turn regulator opinion, and court fortunes, around.
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