TON Gets Vote of Confidence: Investors Reject Refund Amid SEC Hearing Delay

The blistering pace at which the latest developments have occured shows no sign of slowing, with the court hearing pushed back to February 2020 and investors voting against a refund of up to 77% of their initial investment.

Since the hammer of the SEC came down on Oct. 16, the rights of TON investors have taken center stage.

A leaked copy of the sales contract signed by investors revealed a "Force majeure," a clause that indicated the firm might not be obliged to refund investors in the event of regulatory changes.

Investors vote on refundNow, investors voted against the return of their funds according to two sources close to the Telegram team.

Investors in the two private rounds of sales in February 2018 may well have been accredited, but no restrictions were put in place to prevent them from subsequently reselling their newly acquired tokens to investors that do not meet the same SEC requirements.

"In the February hearing Telegram anticipates asking the court to rule on the core argument that Grams are not securities. The October 24 hearing, in contrast, was only to consider whether a delay should have been mandated, without conclusively resolving the core argument."

Avichal Garg, entrepreneur and co-founder of Electric Capital, told Cointelegraph that the delay will give the SEC and TON time to negotiate, and that he expects an out-of-court settlement to be the most likely outcome: "The second most likely outcome is that TON launches outside of the US and returns money to its US based investors."

Court delaysAccording to a court order shared with Cointelegraph on Oct. 19, Telegram's hearing with the SEC in New York is due to take place in early 2020, on Feb. 18-19.

"Since Telegram had already determined to delay its launch of TON, the court may have also taken the view that rushing to conduct the hearing on October 24 is no longer warranted."

"The justice system here is in charge and in control, not Telegram or its TON blockchain project. Second, I think this is an attempt by the court to work parallel with the SEC in ensuring that in no way, can Telegram continue to allegedly violate U.S. securities law by allowing it to continue offering, selling, delivering, or distributing its 'Grams' to any person or entity."