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Toncoin Hits All-Time High Amid IPO Speculation: The History of the Telegram Coin

Last Updated April 10, 2024 3:21 PM
James Morales
Last Updated April 10, 2024 3:21 PM

Key Takeaways

  • Toncoin hit a new all-time high price of over $7.
  • The recent rally comes amid speculation that Telegram could pursue an IPO.
  • Although Telegram cut its ties with TON in 2020, the two platforms remain closely integrated.

After the value of Toncoin (TON) more than doubled in the space of a month, the cryptocurrency briefly climbed above $7 on Tuesday, April 9, setting a new record price and eclipsing ADA as the token with the 9th largest market capitalization.

Toncoin’s recent success has been linked to speculation that Telegram could soon go public. So what is the cryptocurrency’s relationship with the messenger app?

The Origins of TON

Back in 2017, Telegram started exploring blockchain solutions that could power decentralized payments, file storage and other applications for the messenger service.

Unable to find a suitable platform among existing blockchains, the firm launched the Telegram Open Network (TON) testnet in 2018.

Throughout the next 2 years, the project attracted significant attention from investors, developers and ordinary Telegram users. 

However, under pressure from the US Securities and Exchange Commission (SEC), Telegram would ultimately be forced to abandon TON.

Telegram vs. the SEC

In October 2019, a few months before the planned launch of the TON mainnet, the SEC obtained a court order preventing the distribution of Grams, the network’s native token.

In what has become a familiar story, the agency alleged that the distribution of grams would amount to an unregistered securities offering.

While Telegram contested the SEC’s claims in court, Judge P. Kevin Castel ultimately sided with the regulator, a decision that would bring about the end of TON as it was originally conceived.

Following its defeat in court, Telegram announced the end of its involvement with TON and agreed to return $1.22 billion to investors.

Commenting on the decision in a blog pos t, CEO Pavel Durov lamented the global scope of the ruling:

“The US court declared that Grams couldn’t be distributed not only in the United States, but globally. Why? Because, it said, a US citizen might find some way of accessing the TON platform after it launched. So, to prevent this, Grams shouldn’t be allowed to be distributed anywhere in the world – even if every other country on the planet seemed to be perfectly fine with TON.”

“Unfortunately, we – the 96% of the world’s population living elsewhere – are dependent on decision-makers elected by the 4% living in the US,” he added.

The Toncoin Era

While the SEC’s victory served a major blow to the TON project, by the time Telegram withdrew its support, a network of independent users had grown up around the platform.

As a public blockchain, Telegram had no power to prevent third parties from continuing to develop applications for TON.

Released from the company that originally developed the technology, the newly independent ecosystem rebranded testnet Grams as Toncoins and collectively agreed that the T in TON now stands for “the.”

Telegram initially distanced itself from the spinoff blockchain, no doubt over concerns that the SEC would take a harsh view of any continuing links.

However, in December 2021, Durov made his first public endorsement of the post-Telegram blockchain.

I’m proud that the technology we created is alive and evolving,” he stated .

“Unlike the original TON, Toncoin is independent from Telegram. But I wish its team the same success. Coupled with the right go-to-market strategy, they have all they need to build something epic.”

TON Today

Considering its history, TON remains closely tied to the Telegram app, even if Telegram the company has cut its ties to the blockchain. 

Most TON-based decentralized apps (DApps) take advantage of Telegram’s open-source codebase to integrate with the platform. The blockchain now supports all manner of Telegram wallets, bots and Web3 games which can be easily accessed by the messenger app’s 900-million-odd users.

Telegram also recently introduced the option to pay for ad purchases with Toncoin.

While the official relationship may be over, this ongoing symbiosis explains the connection between Telegram’s potential IPO and Toncoin’s recent rally.

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