The famous messaging service Telegram has unexpectedly cancelled its Initial Coin Offering (ICO), which was announced several times in the last months. The information has been revealed by The Wall Street Journal on May the 2nd.
Telegram Cancels ICO
One of the most important Initial Coin Offerings of all times has been cancelled. The Telegram Open Network (also known as TON), has been encouraging investors to place their money in one of the biggest opportunities for the year. Until now, the company raised $1.7 billion dollars.
Apparently, due to the tight regulations that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) may implement, Telegram decided to stop its plans to build the project.
Since TON has been announced, the SEC has sent subpoenas to different crypto-related companies, and informed that ICOs could be considered as securities. Back in February, SEC chairman Jay Clayton said that ICOs are being conducted illegally and that ICO founders are not following the security laws established.
At the same time, Telegram could have simply raised the money needed through its private sale. In this case, the company would no longer need an ICO. Between February and March, the company raised $1.7 billion dollars with less than 200 private investors. An important sum considering that some ICOs would just develop good products for less than half of this amount.
If Telegram’s ICO is suspended, it does not mean that its projects for the TON are totally cancelled. Indeed, it could be developing this product without necessary asking for more investments.
Telegram Open Network aims to create a platform that will handle transactions, that would be scalable, user friendly and that would provide its users with a virtual currency for transactions and other uses.
According to Anton Rozenberg, a former Telegram’s employee, the virtual currency would be used to aid users that live in oppressive governments, and the platform would be used to create smart contracts, among other things. Moreover, the company would launch a light wallet that would allow individuals to easily store their currencies.