Telegram, the secure messaging app, will not be releasing a public Initial Coin Offering (ICO) for their cryptocurrency called the Telegram Open Network (TON).
According to a report from the Wall Street Journal, sources familiar with the matter said that the company recently decided against opening their ICO to the public. The presale raised $1.7 billion from fewer than 200 investors. Investments in Telegram Open Network was only open to a select group of investors that included institutional investors and ultra-high net worth individuals.
There was a considerable amount of hype surrounding the ICO, but information regarding the future of it has been incredibly scarce, which is why it comes as no surprise that they ended their investment round in the presale stage.
Because ICOs are likely to be considered as unregulated securities by the US Securities Exchange Commission, the process of opening the ICO to non-accredited investors would entail a significant amount of legal ramifications. Currently, Rule 506(c) of the Securities Act Regulation allows for the sale of unregulated securities as long as they are only sold to accredited investors and that all funding is reported to the SEC. To be considered an accredited investor in the US, one must have a net-worth of at least $1,000,000 (excluding the value of one’s residence) or make at least $200,000 annually.
Originally, it was reported that Telegram’s overall fundraising goal in the ICO and presale stages was $5 billion, but since then the SEC has stepped up their enforcement of ICOs and cryptocurrencies alike. The recent changes to the SEC’s enforcement of the industry is likely to blame for Telegram cutting their ICO in the presale stage.
The Telegram Open Network’s goal is somewhat similar to Ethereum’s in that it will provide a good foundation for other projects to build on. It will create an ecosystem that allows for apps, services, and digital goods to be run through, or stored on, its blockchain. TON will of course work seamlessly with the Telegram messaging application, and many have speculated that it will also enable instant, secure, and private peer-to-peer transfers of money. This has sparked concerns from leaders in Iran, who banned the use of the Telegram app and claimed that TON could enable citizens to avoid capital controls and hide the transference of wealth to other countries.
The future of TON is unclear, but as of now the public will have to wait until it is offered on exchanges to purchase it.