Telegram’s Cancelled ICO Considered As a Billion-dollar Mess

Telegram’s canceled ICO has become a billion-dollar mess, especially since early backers have already cashed in, selling their GRAM tokens for significant returns.

According to TechCrunch, while Telegram received heat from the public concerning their canceled public ICO sale, the problems dated back much earlier.

Telegram’s goal was to create a Telegram Open Network (TON) powered by the blockchain. The idea was to extend the messaging app into an application with many other services including file storage, payments, become censorship-proof, and host decentralized apps. As mentioned in the whitepaper, the goal was to raise $1.2 billion through an invite-only private sale and open sale to the general public. Telegram, however, decided to extend their raise to $1.7 billion before they canceled the public ICO.

The general public cannot purchase the GRAM token until its release on cryptocurrency exchanges. Many investors who have purchased the GRAM token in a private sale are therefore selling their tokens at a 3.5 fold increase.

Since there is a very high demand for the messaging app and significant discounts for early investors, many backers who managed to get in quick are already cashing in on a token that isn’t released to the public yet.

Early backers of GRAM turning over a significant profit

While ICOs attracted considerable interest, Telegram’s situation is very unique since investors are already gaining a positive ROI despite the canceled ICO.

As reported by The Wall Street Journal, on May 2, 2018, Telegram canceled the public sale. While it’s uncertain why many speculate that there was no further reason to open the sale to the public if they had already reached their goal of $1.7 billion to less than 200 private investors. A close source mentioned that stricter ICO regulations were a contributing factor.

While there’s no clear timeline concerning Telegram’s release of the GRAM token, TechCrunch reported that one source managed to purchase GRAM tokens at $0.37 and is currently looking to sell it at $1.30. Even intermediaries are looking to profit from the opportunity with brokerages happy to connect buyers and sellers in exchange for a fee.

Telegram is currently aware of these unofficial sales. These sales are however not in violation of any laws since there are no regulations around ICOs. Unfortunately, these unofficial deals could complicate token listings and prices on cryptocurrency exchanges. Telegram also does not appear in control of their flow of capital.

Telegram faces criticism and heat from the Russian Government

Many cryptocurrency community members have criticized Telegram’s confusing and messy sales. It is an “opportunistic… essentially a wishlist of things they want to have, and how it will work assuming that their wishlist doesn’t crash and burn,” said Charles Noyes, principal at Pantera Capital. The MIT Technology Review also mentioned that it was “bold but short on ideas.”

Apart from the canceled ICO, Telegram has also been facing problems with the Russian Government. In April 2018, the Russian Government went to the extent of blocking 19 million IP addresses to block Telegram, causing a large number of services to be affected in the crossfire including Twitch, Slack, Soundcloud, Spotify, Amazon, and even Google.

Follow us on Telegram | Twitter | Facebook

Featured Images are from Shutterstock.

Blokt is a leading independent cryptocurrency news outlet that maintains the highest possible professional and ethical journalistic standards.


Please enter your comment!
Please enter your name here