Telegram’s initial coin offering (ICO) has recently been the talk of the cryptotown for 1,7 billion reasons. Now the app’s crowdfund has another reason to be a hot topic.
It is widespread cryptonews that Telegram has managed to source $1,7 billion USD in total funds – $500 million USD more than their ambitious goal. The intention was to fund their project from public sales, but with the first two rounds in private sales raising a cool $850 million USD, and then a further $850 million USD, the company is expected to forgo a public sale entirely.
According to sources with intel of the deal, this decision would come because a public fundraise would likely be a tremendous hassle and not worth the trouble, despite the reward it might present.
Telegram’s proposed blockchain, the Telegram Open Network (TON), is yet to be made which means that the messaging app is essentially selling IOUs for what will be Telegram’s token – dubbed a Gram – under the framework of the Simple Agreements for Future Tokens (SAFT).
According to Anthony Pompliano, a general partner at Morgan Creek Capital Blockchain, “regulatory environment is in a weird place with most teams having more questions than answers” and explains that Telegram’s predicted move might be reasonable, saying that if there is possibility for companies to raise their capital goal through private sales “they’ll continue to do so until there is less ambiguity in regulations.”
The founders of Telegram have been enigmatically quiet about both the ICO and TON, and we’ve heard no confirmation or denial of this potential plan.
Pomliano also said that it seems that “Telegram has already achieved their goal so there would be no reason to conduct a public sale.”
If this is the case, it will save Telegram a great deal of work, since the process of going through legal public sales is a massive undertaking. The company would first need to go through a know-your-customer process as well as a verification procedure to avoid money laundering in order to sell to public investors.
If the sales remain private, the process is far less weighty since known investors have been identified a number of times and the company wouldn’t need to go through the process of ensuring that the investor is trusted to be who they say they are.
The TON technical white paper outlines that an ongoing token sale will continue occasionally, and although this phase might be a public sale of sorts, it won’t begin until the project is launched.
Sid Kalla, a part of the Turing Advisory Group, says that since the “private sales were raised at around the top of the market euphoria” the cryptocommunity would need to see something stable built before a worthy public appraisal. Kalla also thinks that the private investors will be more familiar with setbacks in technology projects and will be more accepting of delays than the general public.
We will only know in time and with official confirmation whether the public sale will be discarded or whether Telegram will look to the public to raise more than the overwhelming amount of funds it has already collected.
We will update as the story develops.