Business 3 May 2018

Gerald Fenech

Telegram calls off public ICO

The popular messaging app Telegram has decided against holding a public initial coin offering (ICO) after having raised a staggering $1.7 billion in a private pre-sale, reports have confirmed. The funding will be used to develop its third-generation blockchain as Telegram seeks to compete with WhatsApp and Messenger for the lucrative messaging market.

The revelation came from an article in the Wall Street Journal, which quoted sources familiar with the matter. According to report, Telegram founder Pavel Durov was pleased with the immense amount raised through the private offering that he was reluctant to go through the regulatory hassles that a public ICO would entail.

Telegram has been very secretive about its token offering,causing several prospective investors to complain that the details on the offering have been extremely sparse and without much clarification. Despite this, the private offering proved to be a success, with filings to the U.S. Securities and Exchange Commission revealing that the company held two funding rounds in which it raised around $850 million each between January and March 2018.

Less than 200 investors contributed to the pre-sale offering and this was, in fact, restricted to high net worth individuals and institutional investors who also had to undergo a rigorous accreditation process.

The sale was conducted under Rule 506 of the Securities Act Regulation D, which allows companies to sell unregistered securities as long as its restricted to accredited investors only. The company also needs to report the round of funding to the SEC with investors subjected to a vesting period that is predefined.

Reports had indicated that Telegram was hoping to raise around $5 billion from the private ICO and public token offering. However, it appears that due to increasingly onerous obligations on ICOs, the company decided not to go ahead with the public sale. In fact, the SEC has recently tightened its rules on ICOs and it has also been blatantly clear that most of the ICOs around are currently violating federal law with their owners liable to massive fines and even prison terms.

Telegram is currently in trouble in Iran, after the government banned its residents from using the messaging platform. This ban was probably in connection with the app being used to organize nationwide protests. However, Telegram’s plans to launch its own cryptocurrency could have played a part in that decision, too.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

Nvidia wants pre-crypto bear stock sold off entirely by Q1 end

Business 1 hour ago

Nvidia wants pre-crypto bear stock sold off entirely by Q1 end

The stockpiles that built up towards the end of 2017 and 2018 have been a major drag on the firm since, which has been struggling to shift units following the collapse in cryptocurrency prices.

Read More
North Korea dissidents turn to cryptocurrency to topple Kim Jong-un

Business 1 hour ago

North Korea dissidents turn to cryptocurrency to topple Kim Jong-un

The group, called Cheollima Civil Defense, is selling some 200,000 visas to a future free North Korea, in hopes of raising as much as $27 million selling the citizenship documents on the blockchain.

Read More
AriseBank CEO pleads guilty to $4.2M fraud

Business 1 hour ago

AriseBank CEO pleads guilty to $4.2M fraud

Jared Rice has entered a guilty plea to one charge of securities fraud, but could have implicated himself in lying to investors during his time at AriseBank.

Read More