An investor in TON lost a lawsuit in London against Telegram

On February 6, 2022, the International Court of Arbitration in London dismissed the claim of mobile application developer Zotobi Management Limited against Telegram Group Inc. and TON Issuer Inc. about $ 280,000 in compensation, Forbes found out. In 2018, Igor Chuprin, managing director and owner of Dubai-based Zotobi Management Limited, invested $ 1 million in Pavel Durov’s TON cryptocurrency, and in May 2020, two weeks after the project closed, he sued the messenger. This follows from a copy of the court’s decision (available to Forbes), its authenticity was confirmed by a source familiar with the court’s materials, as well as a source close to one of the parties to the case. The court dismissed all of Zotobi’s claims and demanded that the company cover Telegram’s legal costs of $ 700,000 and the court’s costs of £ 55,944. The trial took place in the autumn of 2021: Telegram Ilya Perekopsky.

Risk notification

Zotobi Management Limited was established in August 2014. Chuprin is the head and sole owner of the company, according to information on his LinkedIn page. The company is developing software on outsourcing, digital advertising, purchasing Internet traffic, etc., Chuprin wrote on social media. The company has 51-200 employees, according to the organization’s LinkedIn page. The company’s website states that it develops applications and games to order, and its partner network has more than 140 million users in 180 countries. Among the partners are the developer of mobile poker games KamaGames, the developer of software for marketing applications AppLovin, the platform for promoting games Unity Ads and others. Zotobi’s own developments in the App Store include Jolly LOL (pet simulator), Fantastic Fishies (aquarium simulator) and the Battle Gate card game.

Until 2007, Chuprin worked as an editor, graphic designer and PR specialist in Vladivostok, then until 2010 he managed the network of cafes and restaurants of the Staff-DV group, after which he became a manager at Russian Radio in the UAE. He also headed the Cypriot office of the KamaGames mobile game and application development studio for several years (the main project being Pokerist).

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In 2018, he became an investor in TON, but it is unknown whether he invested only his money. After the US Securities and Exchange Commission (SEC) banned the issuance of Gram cryptocurrency, Durov suggested that investors immediately withdraw 72% of the investment or leave the money to the messenger team for another year as a loan and then receive 110% of the investment. Zotobi refused to provide Telegram with its funds as a loan, but the return of $ 720,000 did not suit the company: the developer demanded from Telegram through the International Court of Arbitration in London to return the remaining $ 280,000 investment. Chuprin did not respond to a Forbes email request.

In court, the plaintiff said that “in a hurry” decided to invest in TON and did not read the documents for investors listing the risks before signing an agreement to purchase cryptocurrency, according to court documents. Chuprin insisted in the lawsuit that he did not receive documents listing the risks from Telegram. Perekopsky told the court that Telegram did not monitor the sending of these documents to all investors. “It simply came to our notice then [документ Чуприну]”, – said the vice president of Telegram by video link.

However, the arbitral tribunal ruled that Chuprin either read the documents because they were publicly available on the Internet and discussed in the blockchain community, or “understood all the risks and was not worried.” In addition, the agreement on the purchase of Gram signed by Chuprin states that he read the information about the risks, so the court did not agree with the position of the plaintiff, according to the decision.

Despite the SEC ban, the Telegram messenger could still launch TON outside the United States and distribute Gram to investors from other countries, including Zotobi, a Zotobi spokesman told the court. Durov said during the meeting that Telegram was considering continuing the project outside the United States, but decided it would be “very dangerous.”

When the arbitrators noticed that Telegram’s management should have clarified their work with the SEC in advance, Durov said that the SEC “almost never answers to anyone,” and he did not think waiting for a response from the commission was a good strategy.

Telegram would not work on such a large project, knowing that it is illegal, because it would cause significant damage to the reputation, according to a representative of Telegram. However, the arbitration stressed that the company’s decision to agree to a settlement agreement with the SEC was pragmatic after the temporary ban by the US court on the issuance of cryptocurrency. “Of course, it was possible to appeal and appeal this, but, again, what would be the point of launching [TON] in 2030? ” Said Durov.

The court’s ruling said Zotobi “obviously had better accept Telegram’s alternative loan offer.” But Zotobi stressed that they were not sure about the safety of the money left to the company for another year, the document said.

The plaintiff’s argument was largely formal: he tried to change the terms of the agreement, which were clear: if the project could not be launched for regulatory reasons, the investor was paid a sum less development costs, said Anton Imennov, managing partner of Pen & Paper’s Moscow office. Telegram has made it clear that the risks of the project, including legal uncertainty in cryptocurrency regulation, could lead to a total or partial loss of investment, he said.

Telegram Vice President Ilya Perekopsky declined to comment. Zotobi spokesman David Jibilian, whose contacts are listed in the case file, told Forbes that he did not understand what the process was.

Claims for millions

In addition to Zotobi, several similar lawsuits against Telegram have been filed by other TON investors, a source familiar with the case told Forbes. According to him, the total amount of the plaintiffs’ investments is about $ 122 million, through the courts they demand compensation of $ 34 million – this is the difference between the amount of investment in cryptocurrency and the amount received from Telegram after the project closed.

According to the Forbes interlocutor, one of the investors – the Chinese fund AID Partners Capital II Limited – has already withdrawn the lawsuit from the London arbitration and concluded a settlement agreement with Telegram, under which the parties have no claims against each other, including arbitration costs. AID Partners did not respond to Forbes’ request.

We should not expect a significantly different approach in other cases, says Imennov of Pen & Paper. “Telegram has thoroughly approached the drafting of the agreement and other legal documents, as well as legal support at the stage of problems with the regulator and further interaction with investors,” he added.

According to Imennov, investors could recover the entire amount of investment if they could prove Telegram’s awareness of SEC violations at the time of investment or inaccuracy in calculating the amount of costs, but “the likelihood of such a scenario seems insignificant.”

At the end of February 2021, Da Vinci Capital lawyers notified Durov, Perekopsky and other top managers and Telegram lawyers of their intention to file a lawsuit against TON Inc. and Telegram Inc., a source close to the fund told Forbes at the time. According to two sources close to the company’s top management, the amount of claims in the lawsuit is $ 20 million.

In May 2021, the head of Da Vinci Capital Oleg Zhelezko announced the start of arbitration proceedings against Telegram in London, RBC reported. He then explained that the Telegram team had made a proposal to Da Vinci to return the funds invested in TON “not completely correct”. According to him, the fund received an offer “about 24 hours before the deadline”, so many investors were physically unable to analyze the documents and “get an adequate return” on their investment.

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After the lawsuit was filed, Da Vinci tried several times to reach Telegram to reach an amicable settlement, but the company’s top management “considers such lawsuits absurd, so it showed no interest in negotiations,” RBC reported, citing a source close to the messenger administration.

Da Vinci investors wanted to sign a new loan agreement with TON, but the Telegram team refused because the fund’s investors were Americans, Forbes reported, citing a source close to the fund. After the closure of the blockchain project, Telegram offered investors from the United States only one option – to withdraw 72% of the investment, without the possibility of concluding a new loan agreement. According to the interlocutor of the publication, Disruptive (one of the Da Vinci structures that invested in TON) proved for two weeks that there were no Americans among the investors, and they were allowed to conclude the agreement only five hours before the deadline. A RBC source close to the Telegram administration spoke about this in a similar way. – according to him, Da Vinci “could not provide such confirmation for a long time, so he reduced his own time to the deadline.”

Durov officially announced the closure of the TON blockchain platform and Gram cryptocurrency project in May 2020. The Telegram project attracted $ 1.7 billion from 171 investors, including billionaires Roman Abramovich and Yuri Milner, Qiwi founder Sergei Solonin, businessman Said Gutseriev, Wimm-Bill-Danna co-founder David Yakobashvili and others.

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