The story of Telegram Open Network (TON) is one of bold ambition, rapid development, and abrupt termination—a cautionary tale in the volatile world of blockchain innovation. From its grand whitepaper release in 2017 to its quiet end in 2020, TON’s journey spanned exactly 891 days. Though the project never officially launched, its technological foundation and community-driven revival continue to influence the decentralized ecosystem.
This article explores the complete lifecycle of TON, analyzing its vision, development milestones, regulatory challenges, and ultimate shutdown—while uncovering the enduring legacy it left behind.
The Vision Behind TON: A Blockchain for Mass Adoption
Launched by the Durov brothers—creators of the privacy-focused messaging app Telegram—Telegram Open Network (TON) aimed to solve key limitations in existing blockchain networks. With over 200 million users at the time, Telegram sought to leverage its massive user base to drive mainstream adoption of decentralized technologies.
The core idea was simple yet revolutionary: build a high-speed, scalable blockchain capable of supporting millions of transactions per second, integrated seamlessly with Telegram’s platform. The network would support smart contracts, decentralized applications (dApps), and a native cryptocurrency called Gram, designed to power in-app economies and microtransactions.
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Built on a proof-of-stake (PoS) consensus mechanism and utilizing sharding technology, TON was engineered to outperform Ethereum and other contemporaries in speed and efficiency. It featured the Telegram Virtual Machine (TVM), analogous to Ethereum’s EVM, enabling developers to deploy smart contracts on the network.
With such ambitious goals, TON quickly attracted attention from top investors and developers worldwide.
Funding Success: The $1.7 Billion Private ICO
In early 2018, Telegram initiated a private token sale—often referred to as an initial coin offering (ICO)—for Gram tokens. Unlike public ICOs, this was a closed fundraising round limited to accredited investors.
The offering unfolded in multiple stages:
- First stage: Exclusive access for select high-net-worth individuals, including Russian billionaires like Roman Abramovich and Yuri Milner.
- Second stage: Expanded to additional qualified investors globally, raising $850 million.
- Third stage: Initially planned but ultimately canceled after Telegram surpassed its $1.2 billion target, ultimately securing **$1.7 billion**—one of the largest private crypto raises in history.
Despite a minimum investment threshold of $1 million, smaller investors participated through syndicates and investment groups. The overwhelming demand reflected strong confidence in Telegram’s technical capabilities and market reach.
However, this success also drew regulatory scrutiny—especially as Facebook announced its Libra project around the same time, triggering global concerns about unregulated digital currencies.
Technical Progress: Building a Next-Gen Blockchain
By mid-2018, TON had made substantial technical progress:
- September 2018: Development reached 70% completion, with the Telegram Virtual Machine nearing finalization.
- February 2019: The network was reported 90% complete.
- April 2019: Internal testing revealed transaction speeds significantly faster than existing blockchains.
- May 2019: A simplified stable version of the TON test client was released, allowing users to create wallets and execute basic smart contracts.
To accelerate ecosystem growth, Telegram launched a programming contest in September 2019, offering up to $400,000 in prizes for developers building innovative dApps and smart contracts on TON.
That same month, Telegram unveiled an Alpha version of its crypto wallet for iOS, supporting Gram token management—enabling users to send, receive, and store Grams securely.
By October 2019, early investors received key generation tools and were instructed to submit public keys by October 16 to claim their Gram allocations. The network launch appeared imminent.
Regulatory Roadblock: The SEC Steps In
Just weeks before the planned rollout, the U.S. Securities and Exchange Commission (SEC) intervened.
On October 12, 2019, the SEC filed an emergency action and obtained a temporary restraining order against Telegram. The agency argued that Grams were unregistered securities and that their distribution violated federal law.
“The SEC’s concern was clear: if Grams were sold to foreign investors who then resold them to U.S. residents, it would effectively bypass American securities regulations.”
Telegram maintained that Grams were intended as a utility token, not an investment vehicle. However, the court disagreed. In April 2020, Judge Kevin Castel ruled that Telegram could not distribute Grams—even internationally—due to the likelihood of U.S. market infiltration.
This decision crippled TON’s go-to-market strategy and severed its primary funding model.
The End of TON: Official Shutdown Announced
Faced with insurmountable legal barriers, Telegram attempted a final pivot:
- On April 30, 2020, it postponed TON’s launch to April 2021.
Investors were offered two options:
- Refund 72% of their investment immediately.
- Convert their stake into a loan, repaid with 110% interest by April 2021 if they agreed to wait.
Yet just days later, on May 7, 2020, a decentralized group of developers launched Free TON, an independent blockchain based on TON’s open-source code.
Then, on May 12, 2020, Pavel Durov announced the official end of Telegram’s involvement:
“Today is a sad day for Telegram. We are announcing the termination of our blockchain project… While networks based on TON technology may emerge, we will have no affiliation with them.”
Durov criticized U.S. regulatory overreach, stating that American control over financial infrastructure and tech platforms gave it disproportionate power over global innovation.
FAQ: Common Questions About TON’s Demise
Why did Telegram shut down the TON project?
Telegram terminated TON primarily due to legal pressure from the U.S. Securities and Exchange Commission (SEC), which classified Gram tokens as unregistered securities and blocked their distribution.
Was TON fully developed before it was shut down?
Yes—by early 2019, TON was reportedly over 90% complete. Internal tests showed high performance, and testnet clients were already distributed to developers and investors.
What happened to the $1.7 billion raised?
Investors received either a partial refund (72%) or opted for a loan agreement promising 110% repayment by April 2021. Most funds were returned without further penalties.
Is TON still active today?
While Telegram abandoned the project, community-led initiatives like Free TON and later The Open Network (revived independently) continue to develop on its original framework.
Could TON have succeeded under different regulatory conditions?
Many experts believe so. With favorable regulation or a delayed launch strategy avoiding U.S. jurisdictional issues, TON might have become a major player in the blockchain space.
Did Telegram lose all interest in blockchain after TON?
Not entirely. In later years, Telegram explored integrations with third-party wallets and supported crypto payments via bots—suggesting ongoing interest in decentralized finance (DeFi) use cases.
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Legacy and Lessons: What TON Left Behind
Though short-lived, TON’s impact endures:
- Its sharding architecture and TVM design influenced subsequent Layer-1 blockchains.
- The concept of embedding crypto into messaging apps remains compelling—seen in projects like WhatsApp payments and Signal’s exploratory efforts.
- The Free TON community kept development alive, proving that open-source decentralization can outlive corporate sponsorship.
TON’s downfall underscores a critical truth: even technically superior projects can fail without regulatory alignment.
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Final Thoughts
The 891-day journey of Telegram’s blockchain project serves as both inspiration and warning. It demonstrated what rapid development, visionary leadership, and massive funding could achieve—and how swiftly it could all collapse under legal pressure.
While TON never went live under Telegram’s banner, its spirit lives on in decentralized networks built upon its codebase. As global regulations evolve and Web3 adoption grows, the dream of a scalable, user-friendly blockchain integrated with communication platforms may yet be realized—perhaps even by a reborn version of TON itself.
For now, it stands as one of the most ambitious “what ifs” in crypto history.