Breaking: Telegram Cancels Its Public ICO
In an unexpected move, Telegram has decided not to proceed any further with its initial coin offering. The company claims that it’s already brought in a significant amount of money from a more restricted group of investors, according to an anonymous source who spoke to The Wall Street Journal.
Last month, the company announced that it hit $1.7 billion in funding after its second private presale, which was offered only to 94 investors and raised $850 billion. This was such a successful presale that Telegram may have decided not to involve the public in its offering.
With over 200 million active users, the startup is looking to embark on an ambitious endeavor that would create a blockchain-powered decentralized encrypted messaging network fueling itself through a cryptocurrency.
No GRAM tokens have been sold yet, but we are assuming that Telegram will distribute them among investors that participated in the first two presales.
Although Telegram’s latest SEC filing shows that the sale may continue, the person who spoke to WSJ said that the startup abandoned plans to open it up to the public. This may have been because it doesn’t really need the funding anymore, but there are other factors that may have influenced this decision.
Another person familiar with the messaging company cited the SEC’s recent actions in which it started concentrating more on ICOs. Last month, we discussed how ICOs were using SAFTs to get around the SEC’s ambiguous utility requirements.
This may very well be Telegram’s strategy, as its tokens do not currently have a utility until the ICO has finished developing the infrastructure for them to be bought and sold in exchange for services inside the ecosystem.
To avoid getting labeled a security and entering SEC limbo the startup may just restrict its token sale to accredited investors. A SAFT is not a guarantee that the SEC won’t start scrutinizing Telegram, but it certainly gives the company the best chances it can get not to strike the ire of the government agency.
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