After raising a whopping $1.7 billion from around 200 investors, Telegram Messenger LLC, decided to cancel their Initial Coin Offering (ICO) for its token, Telegram Open Network (TON) and cryptocurrency ‘Gram’.
According to a report in The World Street Journal (WSJ), the ICO was cancelled because, the messaging app believed it had raised enough money and did not wish to attract the scrutiny of the Securities and Exchanges Commission (SEC).
The app had raised an initial $850 million in presales by Feb. 18 and then another $850 million by March 29. The original plan was to raise $2 billion in total with the presale process, to be followed by a public ICO that would allow potentially anyone to buy “Gram” tokens up to the cap.
Officially, Telegram intends to use the money collected from its pre-ICO sale to build a third-generation blockchain called TON that will use Gram as its cryptocurrency. The company tried to hype the initiative by throwing in a lot of buzzwords such as describing it as an “open network” that “can become a Visa/Mastercard alternative for a new decentralized economy.”
According to CCN, most investors have claimed that Telegram has been “notoriously opaque about its transparancy, with many investors being unable to convince the company to provide them details of the offering.”
Recently in the past few months, the SEC has been clamping down on unregulated exchanges and ICOs. It told the Congress that “ICOs are a security and should be regulated as such.”
Chairman of SEC, Jay Clayton said, “There are none that I’ve seen that aren’t securities. To the extent something is a security, we should regulate it as a security.”
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