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Telegram opens lid on TON project amid SEC spat: ‘Grams won’t help you get rich’

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SEC pauses Telegram’s $1.7b cryptocurrency play
The Securities and Exchange Commission has taken emergency action to halt the digital token offering that has already raised $1.7 billion.

Telegram has published details concerning TON in a bid to clarify the project while embroiled in a regulatory case with the US Securities and Exchange Commission (SEC). 

The encrypted messaging app service has kept the project under a relatively tight lid until now, with details of the Telegram Open Network (TON) blockchain system limited to Grams, the cryptocurrency connected to Telegram, an Initial Coin Offering (ICO) launched in January 2018 that generated funds for the project, and a planned public release that had to be delayed until April 2020 due to SEC’s complaint. 

Only days before the intended release, SEC stopped the project in its tracks and obtained a temporary restraining order against the company based on claims that Telegram’s ICO violated the US Securities Act as an unregistered securities sale.

SEC alleges that Telegram also did not provide investors with the information relating to TON’s “business operations, financial condition, risk factors, and management that securities laws require.”

See also: SEC seeks to force Telegram to reveal how $1.7bn ICO funds were spent

In light of “recent events,” Telegram has now revealed additional details on the TON project. In a blog post on Medium, the company has first tackled Grams on the insistence that the token should not be considered an investment product. 

“You should NOT expect any profits based on your purchase or holding of Grams, and Telegram makes no promises that you will make any profits,” the post reads. “Grams are intended to act as a medium of exchange between users in the TON ecosystem. Grams are NOT investment products and there should be NO expectation of future profit or gain from the purchase, sale or holding of Grams.”

In addition, Grams do not represent equity, ownership stakes, rights, or shares. In the typical way that cryptocurrencies operate, Telegram further warns that “Grams won’t help you get rich,” and you should expect market fluctuations. 

CNET: TikTok flaws could have let hackers text you malware

After launch, the TON blockchain itself will be opened to third-party developers as a decentralized project. Telegram says there is no guarantee that the company will have any hand in future development after launch and the code will be both open-source and available to view by the public. 

“We hope that as a result of this project Grams will become a true complement to traditional currencies, improving the speed, efficiency, and security of everyday commercial transactions globally,” Telegram says. “We believe that the TON Blockchain technology will create a stable ecosystem and represents a significant improvement upon previous platforms in terms of speed, usability, and scalability.”

When it comes to the anticipated integration of a cryptocurrency wallet within the Telegram messaging application, the firm now says the TON wallet will be made available “solely on a standalone basis” — at least, until the SEC issue is resolved.

TechRepublic: How to set up facial recognition to sign into Windows 10

“Telegram may integrate the TON Wallet application with the Telegram Messenger service in the future to the extent permitted under applicable laws and governmental authorities,” Telegram says. 

Furthermore, Telegram said the organization “is under no obligation, and makes no promise or commitment, to ever establish a TON Foundation or similar entity in the future.”

Earlier this month, the US regulator filed a court order seeking the means to compel Telegram to explain how over $1.7 billion obtained from investors through the ICO has been spent. According to SEC, Telegram has, so far, provided no financial data. 

On January 6, the motion to compel Telegram for full bank record disclosure was denied with the caveat that the company must still comply with foreign data privacy laws.

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The Five Pillars of (Azure) Cloud-based Application Security

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This 1-hour webinar from GigaOm brings together experts in Azure cloud application migration and security, featuring GigaOm analyst Jon Collins and special guests from Fortinet, Director of Product Marketing for Public Cloud, Daniel Schrader, and Global Director of Public Cloud Architecture and Engineering, Aidan Walden.

These interesting times have accelerated the drive towards digital transformation, application rationalization, and migration to cloud-based architectures. Enterprise organizations are looking to increase efficiency, but without impacting performance or increasing risk, either from infrastructure resilience or end-user behaviors.

Success requires a combination of best practice and appropriate use of technology, depending on where the organization is on its cloud journey. Elements such as zero-trust access and security-driven networking need to be deployed in parallel with security-first operations, breach prevention and response.

If you are looking to migrate applications to the cloud and want to be sure your approach maximizes delivery whilst minimizing risk, this webinar is for you.

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Data Management and Secure Data Storage for the Enterprise

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This free 1-hour webinar from GigaOm Research brings together experts in data management and security, featuring GigaOm Analyst Enrico Signoretti and special guest from RackTop Systems, Jonathan Halstuch. The discussion will focus on data storage and how to protect data against cyberattacks.

Most of the recent news coverage and analysis of cyberattacks focus on hackers getting access and control of critical systems. Yet rarely is it mentioned that the most valuable asset for the organizations under attack is the data contained in these systems.

In this webinar, you will learn about the risks and costs of a poor data security management approach, and how to improve your data storage to prevent and mitigate the consequences of a compromised infrastructure.

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CISO Podcast: Talking Anti-Phishing Solutions

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Simon Gibson earlier this year published the report, “GigaOm Radar for Phishing Prevention and Detection,” which assessed more than a dozen security solutions focused on detecting and mitigating email-borne threats and vulnerabilities. As Gibson noted in his report, email remains a prime vector for attack, reflecting the strategic role it plays in corporate communications.

Earlier this week, Gibson’s report was a featured topic of discussions on David Spark’s popular CISO Security Vendor Relationship Podcast. In it, Spark interviewed a pair of chief information security officers—Mike Johnson, CISO for SalesForce, and James Dolph, CISO for Guidewire Software—to get their take on the role of anti-phishing solutions.

“I want to first give GigaOm some credit here for really pointing out the need to decide what to do with detections,” Johnson said when asked for his thoughts about selecting an anti-phishing tool. “I think a lot of companies charge into a solution for anti-phishing without thinking about what they are going to do when the thing triggers.”

As Johnson noted, the needs and vulnerabilities of a large organization aligned on Microsoft 365 are very different from those of a smaller outfit working with GSuite. A malicious Excel macro-laden file, for example, poses a credible threat to a Microsoft shop and therefore argues for a detonation solution to detect and neutralize malicious payloads before they can spread and morph. On the other hand, a smaller company is more exposed to business email compromise (BEC) attacks, since spending authority is often spread among many employees in these businesses.

Gibson’s radar report describes both in-line and out-of-band solutions, but Johnson said cloud-aligned infrastructures argue against traditional in-line schemes.

“If you put an in-line solution in front of [Microsoft] 365 or in front of GSuite, you are likely decreasing your reliability, because you’ve now introduced this single point of failure. Google and Microsoft have this massive amount of reliability that is built in,” Johnson said.

So how should IT decision makers go about selecting an anti-phishing solution? Dolph answered that question with a series of questions of his own:

“Does it nail the basics? Does it fit with the technologies we have in place? And then secondarily, is it reliable, is it tunable, is it manageable?” he asked. “Because it can add a lot overhead, especially if you have a small team if these tools are really disruptive to the email flow.”

Dolph concluded by noting that it’s important for solutions to provide insight that can help organizations target their protections, as well as support both training and awareness around threats. Finally, he urged organizations to consider how they can measure the effectiveness of solutions.

“I may look at other solutions in the future and how do I compare those solutions to the benchmark of what we have in place?”

Listen to the Podcast: CISO Podcast

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