Welcome to one of the weirdest and most exciting weeks in crypto. This week, Telegram has left its blockchain project; Bitcoin’s halving came and went; and the author of Harry Potter opened and then hastily closed the door leading to the crypto rabbit hole.
Telegram leaves the Telegram Open Network
Telegram, the creator of the eponymous 400 million strong end-to-end encrypted messenger app, this week the lights of his crypto project, 2.5 years in the making. The Telegram Open Network, which had raised $ 1.7 billion in an ICO, was intended as a way to make money from the messenger app, which is not currently making money.
TON would be integrated into the messenger app powered by its native currency called Grams. The Telegram team would keep some of that $ 1.7 billion to themselves as they continued working on the app.
But the launch, originally planned for the the end of October, used to be delayed after the SEC filed a lawsuit against Telegram alleging that the $ 1.7 billion ICO was an illegal securities offering. Telegram agreed to postpone the launch of the network until it was all ready, and promised to return investors their money if the network were not to launch on April 30.
That day came and went; the network was still not starting, and Telegram offered investors their money back. The project was stopped two weeks later.
Telegram had argued that the TON ICO was legal because a so-called SAFT agreement was used. Designed by a coterie of New York lawyers in 2018, the SAFT, or Simple match for future tokens, facilitated the sale of the Turn right to future grams. Under the securities law, a token sale is likely to constitute a securities sale if people buy investments.
The lawyers thought that if investors only received their tokens once the network was up and running, it would be conceivable that those tokens would no longer be speculative investments, but really useful. Therefore, investors bought the right to receive tokens at a later date.
But the SEC was not convinced; it said there was no point in separating the two. Judge P. Kevin Castel, the New York judge who presided over the case, seemed to agree. He came on March 24 wrote that “the SEC has significantly demonstrated the probability of success by proving that Telegram’s current plan to distribute Grams is an offer of securities.”
Telegram then gave up. “Today is a sad day for us here at Telegram. We announce the termination of our blockchain project. Pavel Durov, co-founder of Telegram, wrote in a blog post earlier this week. “Telegram’s active involvement with TON is over.”
All this could mean that the SAFT is deadsome lawyers said.
Others have picked up the cloak; last week, an independent group of developers launched a network based on the TON source code Free TON. It runs on “TON Crystals”, not Grams, and is supported by professional node validators.
“This is a community launch; a public launch by people interested in seeing free TON work, “said Ron Millow, head of sales at TON Labs, one of the third party TON developers who launched the forked blockchain, in a public Q&A session at May 7 for people interested in the project.
Telegram distanced itself from third party projects. “Don’t trust them with your money or data. None of the current or former members of our team is involved in any of these projects,” Durov said in his blog post, adding, “Although networks based on the technology we TON have been able to appear, we have no ties to them and they are unlikely to ever support them. “
Halving has little effect on the price of Bitcoin
Ah, the Halving Bitcoin, also known as ‘Bitcoin’s Big Day’. Because of a monetary policy baked into the Bitcoin protocol, about once every four years, the amount of Bitcoin miners receive for validating transactions is halving. Theoretically this limits the supply of new Bitcoin, increases the demand for existing Bitcoinand speculators hope, increases the price.
Not much happened after that the Bitcoin halving this year, which took place on Monday evening. The price of Bitcoin not much admitted even though mining yield dropped from about $ 15 million to about 8 million overnight.
“The halving of Bitcoin has been quiet as expected in terms of price and hash rate, and the real impact will emerge in the coming weeks and months,” said Pankaj Balani, Delta Exchange CEO, told us.
So there is still more to come. But the really exciting things happened the weeks before the halving. Bitcoin rose from about $ 4,100 in the mid-March crash of the coronavirus to $ 10,000 about a week before halving, a massive, rapid recovery of the greatest financial recession of our time. The weekend before the halving, fate struck: Coinbase fell briefly, and a massive selloff caused Bitcoin’s price to plummet from $ 10,000 to $ 8,700.
Some think the halving is exciting enough on its own, a time for wine-infused gatherings where the best crypto songs sing and tell stories about the magic of Bitcoin.
“The most exciting thing about it [the halving] is how anticlimax it was! Imagine telling all bankers (or any profession) in the world that their salaries would be cut in half every 4 years. There would be a riot! said Viktor Bunin, protocol specialist at Bison Trails.
“The social consensus on Bitcoin’s monetary policy is strong, and the fact that miners didn’t even have a beep shows that the system is working,” he added.
Harry Potter author J.K. Rowling discovers Bitcoin
One of the world’s best-loved authors looked at crypto this week, and she didn’t like what she saw. On Friday evening, after one cocktail too much, J.K. Rowling asked the internet to explain Bitcoin to her. It was a terrible decision, which she now regrets.
Changpeng Zhao, CEO of Binance, won first prize for the weirdest response. In a now deleted tweet, he wrote, “Give a woman a fish and you feed her for a day; teach a woman to fish and you feed her for a lifetime. Not that you have to eat yet, but … ‘