Telegram Cans Its ICO Plans, but No One Knows Exactly Why



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Telegram shocked the world when the company announced its plan to host an initial coin offering. It quickly became apparent this would not be an ICO in the traditional sense, but rather a glorified IPO with a unique token. It now seems the firm has canceled its fundraising plans altogether. The real reason remains unclear, although SEC scrutiny may have been a contributing factor.

Telegram is Content With its Private Sale

The past few months have been quite interesting for Telegram as a company. After attempting to cash in on the hype surrounding ICOs, things have taken a rather interesting turn all of a sudden. More specifically, the company raised $1.7 billion through a private presale without too many problems, but it then announced that it would not allow regular consumers to invest in the company whatsoever.

That decision was initially altered, as Telegram announced the launch of an upcoming public coin offering. Although there were still concerns over how that would play out exactly, it seems this is no longer a problem. That’s because Telegram Group has completely canceled its public coin offering plans, although no one knows exactly why that is the case.

There are many possible explanations for this sudden change of heart. The company raised a ton of money by selling its proprietary token to under 200 private investors. The money raised is more than sufficient to take Telegram to the next level, although some people may have a different opinion in this regard. Another possible explanation is that the SEC crackdown on ICOs forced the company to rethink its plan.

In any case, the overall plan of Telegram Group to create a new blockchain-based infrastructure has not changed. The company still aims to launch the Telegram Open Network as a competitor to Visa and Mastercard by focusing on the decentralized economy. With $1.7 billion in funding, building out such a protocol is certainly possible, although it may not necessarily succeed.

It is evident the cancellation of the Telegram public coin offering will cause a lot more speculation moving forward. Since no one knows for sure what the real reason is – and the company’s refusal to comment on this situation still in place – all possibilities have to be considered. Some people still openly question the company’s decision not to deal with Bitcoin or established cryptocurrencies.

With more and more scrutiny of initial coin offerings, it seems fewer companies will decide to embrace this business model moving forward. There are a lot of concerns regarding issuing securities tokens, which would require approval from the SEC. As of right now, Telegram has not filed with the SEC regarding its public sale, which may have put the company on the regulator’s radar. Only time will tell how this situation unfolds.



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Posted in Digital Currencies.