Safe messaging service Telegram is canceling its initial coin offering (ICO), an nameless supply advised The Wall Avenue Journal at the moment, and it gained’t be opening up its digital cash for public sale. The cancellation is a blow to public buyers who hoped to get in on the bottom ground of one of many largest cryptocurrency funding alternatives in historical past, with an estimated $1.7 billion already raised.
One other supply cited within the Journal partially attributed the shutdown to more and more tight rules that the Securities and Trade Fee, Commodity Futures Buying and selling Fee, and different lawmakers have proposed since Telegram initially started planning an ICO.
A lot has modified within the regulatory surroundings since January when rumors swirled that Telegram was considering an ICO. In February, SEC chairman Jay Clayton had harsh phrases for ICOs that dodged registering with the SEC. “Many ICOs are being carried out illegally,” Clayton mentioned, testifying earlier than Congress. “Their promoters and different contributors usually are not following our safety legal guidelines.” In March, experiences surfaced that the SEC despatched subpoenas to dozens of cryptocurrency firms together with tech firms that had launched ICOs.
It is also the case that Telegram has merely raised sufficient cash in personal gross sales that it not wanted an ICO. Telegram’s first presale in February raised $850 million from 81 buyers; in March, the corporate mentioned it had efficiently raised one other $850 million from 94 buyers in a second spherical. In complete, Telegram raked in $1.7 billion from fewer than 200 personal buyers.
The cash is supposedly going towards Telegram’s Open Community mission that may proceed to fund its messaging platform and develop new options. The community can be constructed with a public ledger that may finally function a substitute for Visa or Mastercard, Telegram promised.