Official sites: https://telegram10.ru, https://telegram10.com, https://ton10.ru, https://redton.com.ru, https://green-ton.ru, https:/ /cryp-ton.ru and many others.
Today is my review of the TON system, a new scam that has nothing to do with Telegram or Durov. The scammers who created it simply distorted the recent story of blocking Telegram and based on it created another reason to seize money from the population.
Ton Durova - divorce or not?
I would like to traditionally begin my review of Ton with an analysis of the legend that the authors of this project presented to us. According to their version, the struggle between Roskomnadzor and the popular messenger was caused by nothing more than the desire of Pavel Durov’s team to reveal a magical algorithm for automatically making money. When released to the masses, such a powerful tool immediately makes everyone rich, which violates the interests of the ruling elite and the owners of large banks.
Well, at the end of this low-grade blockbuster, Pavel Durov’s team, led by Vladimir Shuvalov, wins, revealing to us an innovative method of earning money called TON. This method is based on efficient and break-even algorithms for banks and hedge funds. That, in general, is the whole story, but now let’s separate the flies from the cutlets:
- Firstly, there are no automatic methods for making money. Everyone should know this from childhood from the fairy tale about Pinocchio and the Golden Key. Money doesn't appear automatically, it has to be earned. In addition, the average life cycle of a hedge fund does not exceed 5 years; what break-even algorithms are we talking about? TON is just another promise of the Grail;
- Secondly, the essence of Pavel Durov’s conflict with the authorities was not at all what the TON scammers assure us of. If you have been watching the news carefully, then you are aware that according to the new bills, telecommunications service operators are required to store user data and transfer it to the FSB upon request. But Telegram did not do this, which is why the conflict arose. So no new methods of earning money were offered to anyone;
- Thirdly, Durov actually has a blockchain project called TON (Telegram Open Network), but it has nothing to do with making money on the stock exchange. And the essence of this project is not to make everyone in the world rich (this is impossible by definition), but to create a secure, decentralized data exchange network.
Thus, everything that the Ton authors tell us is an ordinary scam for suckers that has nothing to do with reality. The scammers simply mixed facts with fiction to create a beautiful legend for their new scam.
A revolutionary way to make money in action
After registering with TON scammers, Kristina Pavlova received a call from a certain Vitaly, who invited her to invest at least $1,000 in the platform, promising earnings of 30-40% per month . The money needed to be transferred to a QIWI wallet, the girl agreed.
“I am a smart person, an economist by training, and I worked in the banking industry for many years. At that moment I had health problems and was on maternity leave with my child. This probably played a role. And the scammers worked very professionally. There were many statements that everything was insured. I was not alarmed that there were no contractual obligations between us,” Kristina Pavlova explains her action.
Vitaly kept in touch with her: they corresponded on Telegram, but the manager always insisted on calling. Both by phone and in correspondence I tried to put pressure: “ Deposit money, and right now we’ll get our first profit!” A very strong market collapse is expected today or tomorrow. We can't miss this! 22% profit on two instruments is expected.”
“He is constantly in touch, constantly pouring something into your brain about profits, about missed opportunities, about the fact that the market is about to jump and you will lose, that you need to take it now. A person falls into euphoria in anticipation of receiving easy money. And then he is asked to top up his account by 500 dollars or euros, and then again and again. And so on until inspiration comes or until the money runs out,” says Christina.
Over the course of several months, the scammers defrauded the girl of about $2,000 .
“You, of course, have heard of us”: A new type of deception on VKontakte
What is the essence of divorce?
In the first video on the Ton website, they assure us that you can test the revolutionary method of making money absolutely free. However, after registering, we immediately find out that we have been scammed, and in fact this is not at all the case.
Immediately after registration, we go to the site, where we are shown a second video, in which a certain Vladimir Shuvalov shows how simply and quickly you can earn money using TON trading algorithms. But now to start the robot you need to top up your account with $250.
Moreover, only fraudulent brokers from the black list, for example, Super Binary or 24option, are available for replenishing your account. Any sane person should already understand the TON divorce scheme at this stage. But just in case, I’ll tell it for those who don’t know.
First of all, the TON algorithm will drain your $250 by opening unprofitable trades. Then broker employees will contact you and offer to use their help to win back what you lost. However, this time we will talk about more serious investments - from $1000 and above.
Fraudsters who call themselves experienced analysts will scam you for loans, lie about 100% deals and do their best to scam you out of money. Naturally, you won’t be able to make money from this scam; moreover, even if you just try to refuse and withdraw your own money, you won’t be able to do that either. It turns out that you need to pay tax, insurance, a fine - and so on in a circle until the money runs out or until you get tired of it.
What is the TON team now?
According to Makosov, today TON is a decentralized community of developers, designers, marketers and business developers. The project, according to Anatoly, does not have a central issuer or person responsible for the development of the project as a whole.
As the developer said, active members of the TON community, “based on their own capabilities and resources,” are working on the project at their own discretion, developing the technological component and promoting the blockchain.
“In general, over 60 developers are working full-time on the project - among them a group of core specialists and several product teams independent from each other. There are separate teams for content (10 people), as well as moderation, which already employs about 20 people. The number of marketing specialists is difficult to estimate, but there are also more than a dozen of them in different teams,” said Makosov.
Key developers can be viewed on the Github website - as Makosov noted, the TON team is not hiding, so it cannot be called completely anonymous. At the same time, according to the speaker, “the main members of the community do not feel a special craving for publicity.”
Telegram 10 from Pavel Durov
Some write to us: “Why are you writing these articles, because people don’t fall for such nonsense.”
Please, here’s an example: “I was already caught, invested 250 bucks and had no time to even place a bet. They call saying the month is ending and there are 6400 bucks in your account. I say take off 1000 and let the rest stay. They say you have to pay 13% income tax (51 thousand rubles), and then deposit 500 bucks to continue. And mind you, not from this money, but separately then you can withdraw from $1000 to $6400. Otherwise, we are obliged to transfer information about income to the tax office, and I didn’t even sign an agreement with them and didn’t invest the money, I just transferred it, in short, a scam .
This is exactly how it will end, this is how they scam people. This is the essence of this scam.
Why is the SEC suing Durov?
According to the commission, Gram is a security and is regulated by US securities law. Consequently, its issuer must provide information about its financial condition, areas of activity, possible risks, management, etc. In the case of TON, this was not done, the SEC believes. The regulator demands that tokens be recognized as securities, investors’ money be returned, a fine paid, and violations eliminated.
There are precedents in American practice when the SEC recognized that tokens are not securities. This is possible if digital “coins” are not sold as investment contracts, a representative of the regulator explained. For example, the SEC does not consider ether and bitcoin to be securities. But with Gram, everything is different: you can’t buy anything with them, no country has yet recognized them as a cryptocurrency, that is, token holders need them as a means of investment. Telegram plans to increase the value of coins and reduce the risks of holders, so they can be resold at a higher price - this is a sign of securities. In addition, Telegram itself positioned the product in such a way that there was no doubt: this is not about a product or currency, but about a security, the commission insists.
Both Durov companies are defendants in the lawsuit: Telegram Group, which develops the Telegram messenger, and its “daughter” TON Issuer, created to launch TON.
Implications for US investors
If Durov and his team release the update on time, the wallet should appear in it. Distributing cryptocurrency to investors' wallets is a technical task. Therefore, when the cryptocurrency is credited, it will be impossible to return it, one of the investors in Durov’s cryptocurrency tells Forbes.
At the same time, legally, the SEC will no longer be able to present anything to Telegram, since the tokens will be sold by primary investors, and not by Telegram itself or offshore companies that are banned, Internet Ombudsman Dmitry Marinichev explains to Forbes.
American investors—there are 39 of them, according to the SEC's lawsuit—whose interests may suffer due to the ban, invested $424.5 million out of $1.7 billion in the project. In total, Durov raised money from 171 investors. Theoretically, Durov can return the money to American investors, but he is unlikely to do so, note two Forbes interlocutors, an investor in Gram and a source close to the developer of products for TON: “Durov, of course, does not want to return the money. Investors wouldn’t want this either - everyone wants to make money,” notes the investor.
Telegram planned to introduce a KYC (Know Your Customer, customer identification policy) requirement for service users in the future, but the company itself stated that it would not have access to this information. Additionally, it is not clear whether identification of transaction participants will be available on the secondary market for Gram. Telegram can launch the platform without the participation of American investors, but the company will not know whether there are US citizens among the users of the platform, for whom the circulation of Gram may be prohibited, and will not be responsible for the circulation of currency in the country.
At the same time, as Marinichev notes, in fact, Telegram did not conduct an ICO, but a private placement among a limited circle of investors. It was ICOs that were banned starting in 2022. Cryptocurrencies as such are not prohibited in the United States.
“In essence, this is an ICO, but in form it is a set of sequential actions that are logical and legal in each iteration,” Marinichev noted. “However, in the end, all of them together will lead to millions of Grams spilling onto the US market and no one, including the SEC itself, will be able to stop, much less control, this process.”
What did Telegram spend money on?
As follows from the transcript of Pavel Durov’s interrogation, in 2018-2019 the company spent $218 million out of $1.7 billion. The entrepreneur admitted that costs should be increased by about 10% (including for transportation costs for employees and rental housing during business trips) . Investors did not control these expenses; Telegram made the sole decision, the SEC emphasized. It is impossible to clearly separate the costs of TON and Telegram - the company uses the same equipment, developers and suppliers for the messenger and blockchain platform, Durov defended himself.
The most significant part of Telegram's expenses is employees. In 2017, Telegram Group employed from 25 to 30 people. In addition, the company used hundreds of independent contractors. Today, according to Durov, these numbers have not changed much. The main part of the team, its core, writes the code. Before the development of the blockchain platform began, the efforts of programmers were mainly focused on working on Telegram, although from time to time experiments were carried out that were not directly related to the messenger. Today this team is developing code for the same applications as before, and is also working on TON, Durov said.
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Approximately 40% of expenses are on equipment (servers, switches, etc.). From October 2022 to early January, the company spent about $10 million more in this area.
The source of financing for the project was also Durov’s personal savings. They appeared after the sale of his share in VKontakte. “It was the largest social network in the post-Soviet space, and I managed to sell it at the right time,” he said during interrogation. The entrepreneur used the proceeds to purchase new servers until 2022. But he could spend his own money later, since he does not share personal needs and requirements.
A private investor from Buffalo, New York also invested in the launch of Telegram, the SEC complaint said. We could be talking about former VKontakte employee Axel Neff, Forbes wrote on October 17.
“You won’t be able to get rich on our cryptocurrency”: Telegram revealed details of Pavel Durov’s blockchain project
Why did you publish instructions for creating TON websites?
At the beginning of February, it became known that Durov’s team had posted instructions for creating websites in TON. To access such sites, you need to install a specialized program on your computer, for example, a TON proxy, through which you can access the TON site from any browser, explains Roman Ivanov, head of the desktop Yandex.Browser. Finding these sites in search engines will be difficult. Thus, Yandex does not currently index such pages.
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“This is an attempt to overcome censorship barriers established by a number of states”
“TON sites should be considered only as an element of a technologically advanced darknet platform, the core of which is the yet-to-be-existent Gram cryptocurrency,” agrees Georgy Banchikov, director of the partnership sales development department at SberCloud. According to him, without the launch of Gram, TON and TON sites will remain “narrow niche tools.” The instructions are intended primarily for developers who can test the technology at an early stage and find bottlenecks in it, believes Forbes’ interlocutor in the communications market. “For now, this is a toy for specialists, but an interesting toy,” he sums up.
In essence, Telegram, as it intended, is creating its own darknet - a network of sites not tied to IP addresses, which are more difficult to track and block, says Anton Rosenberg. Tor is the most well-known such network. “It’s too early to talk about the anonymity of TON sites; the advantages remain encryption and, possibly, higher resistance to blocking. The big question is how much business needs this. After all, well-established technologies that provide encryption of access to sites already exist, from HTTPS to VPN, but bypassing blocking is a rather niche task. LinkedIn, for example, didn’t bother with this,” says the ex-Telegram manager.
“Thanks to TON, users can access the site from countries where the Internet is censored. This may be important for companies that value the anonymity and confidentiality of their visitors,” Sergei Chernikov, technical director of the Combot project and founder of TON.sh, disagrees. Recently, BBC News created a version of its website in Tor so that it could be opened by users in countries where the portal is blocked, the expert recalls: “This is an attempt to overcome censorship barriers established by a number of states.” Chernikov’s companies are considering the possibility of creating websites in TON to “support the ecosystem.” “We are simply planning to open mirrors of existing projects. This is not the creation of new sites specifically for TON. Websites in TON are no different from regular websites. They are simply available on the TON network,” explains the entrepreneur.
In general, the Telegram and TON team has been actively reporting on the development of the platform in recent weeks, despite the risks, including the curtailment of the project due to a court case with the SEC. Rosenberg connects this with the desire of the Durov brothers to show the commission that they are capable of implementing the product they promised. “Apparently, the TON site is an attempt to do something that can be presented in court,” believes a former colleague of the founders of Telegram.
TON Blockchain
This is a key component of TON. It is not just a blockchain, but a collection of different blockchains.
- Masterchain is the most important blockchain, a classic block chain, contains system parameters, the state of workchains and their shards (about them below), hashes of all the latest blocks, the number of Grams issued and other important information. In general, everything essential for the functioning of the system.
- Workchain - connects shards. There can be 232 such workchains in total, each of which has a unique identifier and its own logic. Each workchain, for example, can have its own virtual machine and its own address formats. That is, theoretically, it is possible to create a workchain for processing smart contracts from Ethereum. The first workchain will have a prefix 0 - it is reserved for the main TON workchain.
- Shardchain (hereinafter referred to as shard) is the main part of scaling. Within one workchain there can be 260 shards. Shards can “communicate” with each other, each shard is responsible for certain accounts and obeys all the rules of its workchain.
- Accountchain - we can say that this is an accounting book (ledger) for incoming and outgoing messages of a certain account.
All this was invented to solve two pressing problems. The first problem is the size of the blockchain, which is constantly growing and in the case of Bitcoin in 2022 exceeded 200 GB. Most cryptocurrencies require storing and synchronizing the entire blockchain, and this becomes increasingly expensive as the network grows. The second problem is that making major infrastructure changes often requires “re-creating” the blockchain, that is, making a fork.
TON solves the first problem with the Infinite Sharding Program, as it is called in the document. To explain how it works, it's better to go from afar. Let's start with the fact that a workchain is actually a virtual blockchain that unites several shards. The workchain identifier is part of the identifier of a specific shard, thanks to which you can understand which workchain a particular shard belongs to.
Anyone who is willing to pay the high cost of a transaction on the masterchain and publish the specification and “rules” of the new workchain can create a workchain. However, a consensus of two-thirds of the current validators is required, as they will have to update their software to work with blocks of the new workchain.
Each shard has the following identifier in the form of a tuple: workchain_id and the prefix of the shard itself. The prefix is responsible for those accounts (addresses) that will be included in the shard. For example, if the prefix is 1337, then all addresses that start with 1337 will be in this shard. The prefix can change dynamically and have a length from 0 to 60 bits. This was done in order to glue shards without a load and separate loaded shards.
Accountchain is another virtual blockchain that has an identifier in the form of a tuple: workchain_id and the identifier of the account itself.
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What became known about Gram from the SEC lawsuit
- Telegram sold 2.3 billion coins in the first round and 639 million in the second. In both rounds, the company raised $850 million from private investors. Thus, a total of 2.9 billion Grams were sold for a total amount of $1.7 billion. The prices at which Telegram sold and will sell coins were determined by a formula according to which buyers of the first round paid $0.37 per coin, and second round buyers – $1.33. The market price of the coin at launch will be $3.62. However, even before the launch of TON, coins were selling for $4 on the secondary market.
- At the same time, Telegram has provided “discounts” for the very first buyers: they will be able to buy the first coin for $0.10, after which the price will increase exponentially by one billionth of the value for each subsequent coin until it reaches the market value. This is the “TON formula”.
- In the purchase agreement, the issuer committed to issue and deliver Gram coins to investors by October 31, 2019, otherwise investors could receive their money back minus expenses.
- Of the $1.7 billion raised, the founders of Telegram spent $218 million by January 1 on the messenger and blockchain; a total of $520 million is planned to be spent on development, that is, a third of the collected amount. The Securities Commission especially notes the fact that Durov and the team attracted much more investor money than was needed for development.
- Durov was personally involved in marketing, attracting money from investors. For example, he wrote to one of the investors that the demand for “the third generation blockchain TON and its currency GRAM” will be driven by the availability of this currency for 170 million wallets, which will make Gram comparable to Bitcoin and Ether, which have much fewer wallets.
- A large number of Gram holders should ensure profits for investors, as well as the functioning, growth and development of the ecosystem. One of the documents for investors talked about hundreds of millions of users. The SEC pays particular attention to the number of users, and also notes that the documents for investors contained a promise to make the Telegram wallet the most popular in the world.
- In January 2022, TON representatives held a pitch for an American investor. According to them, the profit could range from 0X to 50X on the amount of investment. This unnamed investor invested $27.5 million in Gram coins, which were worth nothing at the time.
- The founders of TON, in documents for investors, promised high liquidity of Gram: the coin could be sold both to users of the messenger and on various crypto platforms. The SEC writes in its lawsuit that Durov’s team has already made efforts to list the cryptocurrency on crypto exchanges. In particular, the Blackmoon Exchange, owned by one of the top managers of Telegram (Ilya Perekopsky, vice president of Telegram - Forbes ), announced that Gram will be traded on it immediately after the launch of the TON blockchain. Investors were also promised low risk, stability and a virtually guaranteed increase in currency prices, according to the SEC lawsuit.
- Also, the first buyers were promised benefits from using cryptocurrency in the TON ecosystem. The SEC in its lawsuit says that “no “ecosystem” of TON exists or ever existed,” just as there are currently no goods that can be purchased with Gram. The functioning of TON, as stated by its creators, depends entirely on the money of investors, and they can only earn money by reselling their currency.
- Telegram issued 500 million Grams (about 10% of the total volume of issued cryptocurrency) to pay for products for the TON platform from third-party developers. Another 100 million Grams will be issued in favor of the Durov brothers, 100 million - for Telegram developers and about 1.4 billion (28% of the issued Grams) - for other needs of the TON Foundation. Of these, 250 million Grams are going to be transferred to users of the messenger.
- By October 16, investors must receive crypto addresses to which the currency will be transferred.
To sum it all up, the SEC argues that Gram is a security, not a currency, that is going to be sold to a large number of investors. Such a sale requires disclosure, which Telegram did not make. If Grams are issued, it will be difficult, if not impossible, to track who purchased them or know who is currently an investor in the project, according to the securities commission.
The defendants can submit their objections to the court on October 24, according to a document published on the US legal base Court Listner website.
Why was $1.7 billion needed?
The creators of Telegram wanted to spend a third of the proceeds from the ICO ($520 million) on the development of the messenger in the period 2019-2021. Pavel Durov argued the need for such expenses during a two-day interrogation in Dubai (where the Telegram office is located) by the fact that when the service was just created, many VKontakte users decided to try it, simply because it was created by the founders of VKontakte. It would be logical to assume, the entrepreneur explained, that if part of the investment before the launch of TON is given to the development of Telegram, this will increase confidence in both the messenger and the blockchain platform.
“If I see that Telegram needs more resources, I am happy to invest more. I am one of those people who prefer not to own any real estate."
It was also necessary to attract a large amount from a large number of investors to ensure the presence of a sufficient number of validators - users of the platform who would confirm transactions (it was planned that they would change once a month), Durov explained. Validators are needed to guarantee the reliability and security of blockchain technology. According to Durov, there should be at least 20 of them and everyone should own a large number of Gram coins.
