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Telegram was is probably one of the most successful ICOs in history. The messaging app that offers unique texting features such as encryption, called off its public ICO after it raised the staggering amount of $1.7 billion in the presale round.
Reportedly, the money raised is from a small, very private group of investors. The $1.7 billion were raised from just around 200 investors, who all went through special checks and accreditation. Most of the investors are high net-worth individuals. Also, the amount was raised in two rounds with equal amounts – each for $850 million.
Now, as the company progresses through the “third-generation blockchain”, as quoted by CCN, Telegram has decided to cancel altogether the very-much awaited public ICO that would have given access to a wider audience to get a “piece” from the growing company.
The raised funds are for the so-called Telegram Open Network or TON. After raising the money, Telegram decided to save itself from the procedural issues related to a public ICO and just go with the already raised funds.
The strict requirements for who can enter the private presale and the fact that Telegram was never really clear on the token sale has made some investors complain about the whole process.
According to CCN, the company was looking to raise as much as $5 billion after the public ICO went off, together with the already raised amount from the private one. However, once the company gathered the funds and once SEC came on to ICOs and unregistered securities, then the ICO arena changed. Companies are increasingly becoming more cautious about raising money and token sales on their side. Probably, this is one of the reasons why Telegram decided to cancel their public initial coin offering that was planned to raise much more money than what the company has now.
One of the problems associated with the app developed by Telegram is the encryption feature. Messaging in Telegram is encrypted and once somebody writes something, it may never be retrieved. In that sense, some governments are raising concern as to what the messaging app can do. For example, CCN and Wall Street Journal just reported that Iran has banned the use of Telegram in the country, because of the organized protests and turmoil in Iran.
ICOs are getting more and more scrutinized and the fact that one of the long-awaited ICOs got cancelled by the company that is developing it only speaks about the issues related to ICOs, especially large public ones. Of course, it is the nature of Telegram’s product and way of communicating the whole ICO process to investors that also contributed to them cancelling the ICO most probably.