Soon after missing the April 30 deadline to launch the Telegram Open Network (TON), Telegram sent another letter to its investors. In the new letter, Telegram reportedly said that American TON investors will not be able stay in the TON project for another 12 months.

American TON investors will be only eligible for an immediate 72% repayment instead of a 110% refund option in April 2021, Russian news agency RBC reports on May 4.

Telegram had to retract the 110% option due to regulatory uncertainty in the U.S.

The news comes after Telegram offered to refund its investors on April 30. As reported, the firm proposed two options — an immediate 72% refund, or 110% in 12 months. The firm offered the second option as a “a token of gratitude” of trust in TON, promising to provide interested investors with a loan agreement shortly.

According to an investor letter seen by RBC, Telegram had to retract the second option for its American investors due to “uncertain stance by regulatory authorities in the United States.”

Court ruled against Telegram on March 24

Telegram has been struggling to sort out regulatory issues with the U.S. Securities and Exchange Commission (SEC) to launch the TON network and its native Gram (GRM) token since October 2019. 

Having started the project in 2017, Telegram was preparing to launch the TON network in late 2019. However, the SEC deemed Telegram’s $1.7 billion initial coin offering illegal (ICO) arguing that the firm violated U.S. securities law by conducting the ICO.

In March, following a long-running legal dispute, the U.S. District Court for the Southern District of New York tentatively recognized that the SEC has a good chance of proving that Telegram’s GRAMs were unregistered securities. As a result, Telegram was prohibited from delivering Gram tokens to investors, at least until trial. Telegram CEO Pavel Durov subsequently offered a refund plan on April 30, apparently accepting the court ruling.

Soon after Telegram revealed the investor repayment plan, some major figures in the crypto community criticized the TON project. Mike Novogratz, CEO of crypto merchant bank, Galaxy Digital, and a major Bitcoin (BTC) bull, argued that there is no need for either the TON or Gram on April 30. According to reports, the TON network can still be launched by independent validators regardless of the regulatory situation.