Telegram ICO cancelled: Too much money, too much scrutiny
Telegram doesn't want your money. It wants legally safe money, and already has it.
Telegram has become one of the de-facto messaging networks of the cryptocurrency world, so when it announced an ICO near the height of cryptocurrency mania in early 2018, it caught a lot of that mania in the form of giant wads of money.
Its first private "pre-sale" fundraising round pulled in $850 million from a relatively small handful of a few dozen accredited investors. Demand was so high that it pulled off a second private pre-sale round which was expected to do the same.
But by then the markets were cooling, and Telegram was struggling with limited appetite from traders, concerns about its potentially excessive valuation and regulatory concerns. It eventually brushed those aside though, and managed to rake in $1.7 billion all up.
Now it will be quitting while it's ahead, insiders said to the Wall Street Journal.
Part of the reason might be that it simply has enough money. It's the largest ICO in history by a large margin, so that's a fair assumption. Too much money can also be a problem – quite a nice problem, but still a problem – for projects that don't want to tank as soon as they hit the market. At current prices there might be a decent likelihood of this happening already. Raising even more unwanted money might stand to damage investor confidence in the project for little benefit.
Another likely reason is that it's backing away from the heightened scrutiny around ICOs. Its pre-sale tokens were only sold to a select clique of under 200 investors, all of whom were accredited. Launching a token sale to the public is a much riskier affair, with much bigger legal hurdles. Especially when, by some measures, it's already been well oversold and is for a project with dubious technical merits.
"From a regulatory perspective, I think a public sale is considerably riskier for Telegram than a private sale," said Spencer Bogart, partner at Blockchain Capital to Bloomberg. "Considering the amounts raised by Telegram via private sale, there’s really no need to incur the additional risk of a public sale."
In short, Telegram doesn't care much for money, because money can't buy it regulatory love.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO
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