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TON Developers Threaten to Go Rogue and Launch Network as Telegram Battles SEC Lawsuit

While the US Securities and Exchange Commission (SEC) may have temporarily succeeded in stopping the launch of Telegram’s TON network, can they really stop open-source technology?

On March 24, the SEC won an important decision in their court case against Telegram over the legal status of the latter’s $1.7 billion Gram token offering in 2018. The SEC has maintained throughout that the tokens sold were unregistered securities and on March 25 the US federal court granted the regulator an injuction to halt the distribution of Grams as the legal battle continues.

As the picture is starting to look very grim for the launch of the Telegram Open Network (TON), those in the TON Community Foundation are now discussing alternatives: notably their ability to launch with or without the messaging platform’s further participation and without regulator approval.

The Amicus Brief

The TON Community Foundation (TCF) is a non-profit association of TON ecosystem participants on a mission to enable the development of TON as a decentralized system through collaboration and cooperation.

The Foundation was formed amid the escalating legal tensions between the SEC and Telegram. On Feb 14, TCF filed an amicus brief which was in defense of the messaging giant.

The brief focused on the arguments made by Professor Maurice Herlihy of Brown University, in his report on TON for the United States Securities and Exchange Commission. Herlihy had concluded that the network was lacking critical components for a successful launch and was not secure. He also highlighted the lack of uses for the Gram token, from the report, “the TON public documents describe a suite of services that will eventually be purchasable by Gram holders. Today, however, few if any of these services exist.”

TCF insisted in the brief that the TON blockchain is fully operational, has “state-of-the-art prelaunch security” and a wide range of services on offer.

Arguing that the components Herlihy had criticized were not necessary, the Foundation stated that TON, in its current state, could be launched as a mainnet in a “matter of seconds.”

Will TCF Launch TON without Telegram?

Telegram has been fighting the SEC’s allegations that its 2018 token sale facilitated the sale of unregistered securities while fronting as a decentralized system, like bitcoin and ethereum since Oct 2019.

As the US Courts appear to be siding with regulators, granting a temporary halt on Gram distribution; the TON Community Foundation’s founder, Fedor Skuratov told Coindesk on March 25, that the community is seriously considering contingency options like launching the network without Telegram.

According to the article, Skuratov said “Strictly speaking, no additional measures are required to launch TON by the community, except for a consensus within the community. But in order to get recognized, we will need to come to an agreement with investors (at least, with a majority of them).”

Skuratov highlighted that all the code necessary to launch TON is available online as it was published as open-source by Telegram. He explained that they would merely need to create the genesis block and could run the network on a minimum of 13 validators.

G20 Lays Regulatory Foundation to Accept Digital Payments by November Summit

G20 officials have announced that they will begin the preliminary regulatory groundwork for the group to accept digital payments with the work to commence in October.

As announced by its officials, the G20 summit which is represented by 19 countries and the European Union will begin preparations for the group to accept digital payments in October. Digital currency payments could be realized by G20 members before their next summit slated for Riyadh, Saudi Arabia next month.

According to a Kyudo News on July 11, the G20 officials have enacted a policy change in their acceptance of digital assets and have begun building the necessary infrastructure in direct response to China’s accelerated development of its digital Yuan and Facebook’s development of Libra.

New Risks Means New G20 Policy

At the 2019 G20 summit in Osaka in June 2019, the G20 officials agreed that crypto-assets can bring significant benefit to the financial system and the broader economy, according to the “G20 Osaka Leaders’ Declaration”. The officials also expressed that that digital assets do not carry any threat to monetary stability and asserted that technological innovation in payments could bring significant benefits to the economy.

This stance by the officials was contradicted a few months later in October 2019, when the Financial Stability Board (FSB), the G20 body published a study on the challenges that stablecoins pose to the global economy. The FSB stated that regulatory frameworks have already covered several activities associated with stablecoins, although there are other risks that many national regulators could be left unprepared for as well as threats to public policy and financial regulation.

The G20’s policy towards digital assets which is largely steered by the European Union appears to be continuing to react to developments withing the digital assets space, and this latest policy change enactment appears to be mainly driven by China’s announcement that their central bank digital currency (CBDC) architecture has been completed.

Bill Gates Denies COVID-19 Vaccine Microchips and Satanic Conspiracy Theories

Bill Gates, Microsoft Founder and billionaire philanthropist, has responded to conspiracy theories that his charity foundation is planning to use the coronavirus vaccine to implant microchips into the global population. The conspiracy itself appears to have started with a patent for a very innovative cryptocurrency mining system filed by Microsoft earlier this year.

As reported by CNBC on 22 July, Bill Gates directly addressed a poll from Yahoo/YouGov that had shown 44% of Republicans in the United States believed a sensational and thoroughly debunked conspiracy theory—that he planned on microchipping the world population under the cover of a Covid-19 vaccine.

Gates dismissed the accusations as conspiracy and said he hoped that such misinformation would die down. “We need to get the truth out there,” said Gates during an interview on CBS News. “I hope it’ll die down as people get the facts.”

Gates also reasserted that his only goal is to bring the coronavirus pandemic to an end, and he will continue on that mission with his foundation.

Bill Gates COVID Conspiracy Theories and Accusations

In March 2020, Microsoft filed a crypto mining patent with the World Intellectual Property Organization (WIPO) for a new system that proposes using sensors, not microchips, to detect and calculate the amount of energy and time spent on a pre-determined activity, like engaging with an advertisement. The sensors apparently are capable of gauging both physical and brain activity and convert that sum into data which can be used by computers to solve computational problems and create new blocks.

The patent number of the Microsoft crypto mining technology – WO/2020/060606. The number, immediately caught the attention of Oscar-winning Russian director, Nikita Mikhalkov. The director immediately decided it was a satanic plot and appearing on Russian TV, he said, “The 060606 part is somewhat alarming…Is this a coincidence or an intentional selection of such a symbol, which in the Apocalypse of John is called the ‘number of the beast’ – the 666.” .

The director alluded to a loose connection between Microsoft’s patent and the Bill and Melinda Gates Foundation’s efforts to produce a vaccine for the coronavirus, and deduced it was a satanic conspiracy to microchip the world while failing to discover the patent had nothing to do with microchips. The TV appearance brought the conspiracy further into the mainstream and it even trended on Twitter for a time.

Mikhalkov has not been the only public figure to accuse Gates and his foundation of such a conspiracy. Many others including celebrities and public figures as well as members of the general public appear to have been influenced by the mass of disinformation. Recently, Italian politician Anna Cunial called for the arrest of Bill Gates as she believes he is on a mission to depopulate the world by up to 15% as head of a mysterious deep-state world government.

Despite all of these theories being thoroughly debunked—the survey from Yahoo/Yougov, found that around 28% of American adults believed that Gates planned to use a Covid-19 vaccine as a trojan horse to implant billions of people with microchips.

The means that at least 50 million people in the United States alone believe in this debunked conspiracy as recently as May of this year. In fact, there are several popular White House Petitions currently calling for an investigation into the Bill and Melinda Gates Foundation for crimes against humanity.

Gates Just Want to Ensure Covid Vaccine Access for Everyone

In the interview with CNBC on Wednesday, Gates said that people need to look at the facts and that he hopes these accusations continue to die down as people appreciate the problem the world is faced with in not having a vaccine to deal with the coronavirus outbreak—which has killed over 600,000 people globally.

According to the World Health Organisation, there are more than 100 vaccines under development and 23 in human trial. The Bill and Melinda Gate Foundation has pledged over 100 million dollars to support the WHO as well as an additional $1.6 billion to the Gavi Vaccine alliance.

Gates has previously expressed that he wants to ensure that the incoming viable vaccine is not sold to the highest bidder as another reason for his foundation’s intense oversight of the Covid-19 vaccine development.

Gates said, “We want to make sure we don’t have people dying just because they don’t have access to the vaccine…we will get a good deal on the vaccine and we need the world to get a good deal on that. Many of the companies have committed themselves to that.”

NAC Foudation Accuses US SEC of Misleading Court in AML BitCoin Case

The NAC Foundation and its founder and CEO, Rowland Marcus Andrade, accused the US Securities and Exchange Commission (SEC) of prosecutorial misconduct in the SEC’s ongoing legal case against an alleged ‘AML BitCoin’ securities offering.

On October 20, Rowland Marcus Andrade and his company, the NAC Foundation, filed a notice of claim in which they requested a federal judge working at the San Francisco Superior court in California to throw out the SEC lawsuit filed in June this year.

Fraud Case Against the NAC Foundation

In a separate complaint filed in U.S District Court in San Francisco, the SEC charged the Nevada-based NAC Foundation, its CEO Andrade, and co-founder Jack Abramoff (the political lobbyist) with defrauding investors by carrying out a fraudulent unregistered security digital asset “AML BitCoin” which they claimed was an improved and new version of the original Bitcoin due to its security features.

The SEC reported that NAC Foundation managed to raise more than $5.6 million from over 2,400 retail investors by selling digital tokens, which could later be converted to AML BitCoin. The SEC’s complaints alleged that NAC Foundation, its CEO Andrade, and co-founder Jack Abramoff described “AML BitCoin” as better than the original Bitcoin because it allegedly had theft-resistant, anti-terrorism, and anti-money laundering technology built into the coin. As per the SEC’s lawsuit, such security capabilities mentioned never existed, and the development of the token and its blockchain was in very early stages.

However, Andrade has accused the SEC of intentionally attempting to mislead the court by alleging that his company offered technology that never worked. He argued that the commission has anti-money laundering patents associated with the NAC Foundation cryptocurrency “AML BitCoin.”

Furthermore, Andrade argued that the terms and conditions of sales of AML BitCoin apparently indicate that the digital asset is not an investment contract. He said that anyone who has bought AML BitCoin entered in a written contract to understand that token is not an investment.

Moreover, Andrade claimed that all customers understand that the digital asset acts as a medium of exchange and could not be used as a right claiming for ownership in a joint venture, firm, or business.

The defendants also argued that the written conditions of sale clarified that their clients should not have an expectation of a return on investment and further stated that the digital assets were not a financial instrument sold or offered as equity or debt.

Lastly, the defendants claimed that the SEC’s alleged inability to point out important components of Howie’s test with regards to the cryptocurrency indicates that the token is not a security. Therefore, Andrade argued that the situation implied that the commission “has no cases.”

The Scale of Punishment

The U.S Attorney’s Office for The Northern District of California announced separate legal charges against Abramoff and Andrade, charging Abramoff with lobbying disclosure violations and conspiracy to commit wire fraud and Andrade with wire fraud.

If convicted, Andrade faces a maximum period of 40 years in prison and a fine of $750,000 and restitution for his alleged violations, while Abramoff faces a maximum period of 10 years in jail and a fine of $500,000 for charges leveled against him.

NFT Mania Slows with Tapering Transaction Volume on Top Marketplaces

Non-Fungible Token (NFT) marketplaces are seeing a decreasing demand for digital collectables, a trend that might have been aggravated by the recent flash crash in the broader crypto industry.

According to data from crypto market analytics platform Dune Analytics, there has been a steady decline in transaction volumes on OpenSea from September 3. Beyond OpenSea, other competing marketplaces, including Rarible and LarvaLabs, also witnessed a similar trend.

Per the data, the total average Ethereum tokens transacted on September 3 was 56,842.07 ETH across the five platforms featuring Foundation and SuperRare. This volume slumped to 29,371.84 ETH on September 9. The decrease in trading volumes has effectively showcased the shift in demands as gas fees across various NFT blockchains soars and collectors toned down their interests.

Individual marketplaces have also recorded a shrink in the growth metrics for most projects listed. As of the time of writing, the top two projects on OpenSea, including CryptoPunks and Art Blocks Curated, saw their trading volumes shrink by 54.85% and 3.23%, respectively. While Bored Ape Yacht Club deviated from the bearish drop with a rise of 53.30% in its trading volume, the overall outlook of the NFT marketplace is not positive.

With Bitcoin (BTC) and the thousands of altcoins reeling from the impacts of the recent price flash crash, the path the NFT markets trailed shows a great deal of correlation between both offshoots the underlying blockchain technology. There has been an incremental leap in the growth of the NFT metaverse this year as collections continue to go for sale at over-the-roof prices.

The demand the market witnessed has placed outfits like OpenSea under immense staffing pressure as more projects and collectors troop into the market. However, the current interest decline is bound to regain rejuvenation in recent times, as the volatility of the crypto market, which served as its bane in the recent slump, can potentially stir an unprecedented revival.