It has been reported by Wall Street Journal that Telegram (TON), which has amassed $1.7 billion ahead of the much debated initial coin offering (ICO), had turned back, deciding not to go into any form of ICO.
Earlier, Telegram said it would be introducing an ICO to make it get going with its well-used messaging service, however, after generating huge funds that the platform may not be able to use in some years to come, it jettisoned the ICO.
Investors, among which are top Wall street stakeholders rallied round Telegram, may be due to its close to a billion user database, remember it just celebrated reaching 200 million users, and an increasing number of potential users day by day.
It was announced earlier, that Telegram had previously confirmed before Securities and Exchange Commission (SEC) that it generated $850 million from 81 investors in a private deal, and at the same time, in March, the messaging company confirmed it amassed another $850 million from around 94 different investors, making the company financially upright. The investment were gathered from serial investors who have net worth of at least $1 million, or more.
The SEC filing indicated that the accrued fund is to be used for the development and maintenance of Telegram Messenger, TON Blockchain, and for other miscellaneous activities described in the ICO materials. While the ICO investors are not officially disclosed, the secured messenger app, which the founder, Pavel Durov branded as encrypted and hack proofed has 40 million users from the Middle East Iran, while attracting more than half a million every day.
Surprisingly, Iran is barring the app for creating unrest in the country, a decision it took after Russia placed embargo on the app.
Why the Ban?
The fact that Telegram promises its users privacy has made it received series of criticisms from countries who perceived the popular instant messaging app as a threat to peace, and a base for terrorists.
According to some reports, Telegram was accused of being used by the Islamic State for creating unrest in the middles east, with the dreaded organization using the channel for claiming perpetration of the attacks. On this basis, the governments of Iran and Russia are blocking the messaging app. This may have a thunderous setbacks on the app, however, with the newly gathered fund, it could be said that it is beyond the sky for the app.
Ahead of the ban, Russian government have tried to force the founder of the app to provide users information, and reveal some concealed information, but the founder refused vehemently.
The $1.7 Billion Is Huge For Telegram
The $1.7 Billion raised by Telegram is not a small fund. The aim of the platform is to generate something around $1 Billion, as said in 2017, with the aim of rivaling Bitcoin in digital payment.
In a disseminated information by Journal, Telegram aims to be a “digital payments platform” that will compete with BTC using a network that is solely depended on blockchain ledger technology with the aim of becoming a competitor to Visa and Mastercard.
Is Pavel Durov Truly Out Of Fund?
Around February, when Telegram revealed it has generated $850 million in the first phase of its pre-ICO. The amount, according to observers and available records, is the highest generated in the history of token sales till date. Afterward, the information that the fund doubled surfaced, making enthusiasts infer that the process appeared a scam.
Many said it is laden with atoms of scam, and may not have a good end in the long run. Forbes contributor, Jason Bloomberg, maintains that “it is scam among cryptocurrency scams”.
Is Telegram Token An Intellectual Scam?
Gregory Klumov, CEO and Founder of STASIS, says Durov “would’ve eventually run out of money,” and “therefore he opted for an ICO as a mechanism to raise funds without getting outside investors into Telegram’s shareholder capital.”
Travis Scher, Vice President of Investments at Digital Currency Group also sees the ICO as an intellectual scam.
“It really felt like it was one of these start-ups that’s burning through cash and needs a way to bring money in to keep funding their operations.”
While it was stated in the past, that Telegram, going by the platform policy, is a non-commercial project.
“It also cannot be sold. We’re not building a “user base”, we are building a messenger for the people,” the platform had said in the past.
Note, that the platform was managed with Durov’s fund, until there appears a new hitch, making it look for means to generate fund to finance the platform, hence devised to use tokens.
It cannot be solely claimed that the move is a scam, for a number of reason. One, Telegram is becoming a base for cryptocurrency breaking news.
The CEO and founder of 3.0 Capital says “Telegram is my crypto world…It’s one of the first things I check in the morning and one of the last things I do at night.”
Ryan Gilbert, Partner at Propel Ventures in a sentiment made known that “Telegram users are really at the epicenter of the whole crypto boom…Secure messaging should be free for everyone”.
Considering the recent war on ICO on Google and other social platforms, Telegram messaging app has benefited from the recent trend the most. Since it has amassed necessary fund, the next is for the app to boom and begin to gain than those who blocked cryptocurrency advertisement. However, there is one disheartening information, the generated income is to be shared among the investors, since there is no ICO parse due to the reported cancellation.