The much-awaited Telegram ICO will not be happening, according to reports made by The Wall Street Journal. The news stated that the instant messaging platform is cancelling the hyped up crowdsale, and will no longer avail its utility tokens to the public. This unforeseen development has caused unpleasant shockwaves amongst investors who were eagerly waiting for the event, expected to the largest ICOs of recent times. The preliminary rounds of the token sale had already raised a whopping $1.7 billion, a worldwide record figure.
Stringent SEC Measures
Rumor has it that the unexpected cancellation was as a result of the stringent regulatory measures imposed by the SEC, CFTC and other relevant authorities. Since Telegram announced the impending crowdsale, the agencies have made significant strides towards the implementation of rules governing initial coin offerings and the cryptocurrency sector at large. To avoid being placed under a constant spotlight, Telegram’s team decided to put off the upcoming crowdsale.
Since the turn of the year, the regulatory environment concerning ICOs has undergone radical changes. Earlier this year, SEC’s chairperson Jay Clayton proclaimed that a substantial number of ICOs were being conducted illegally. This tough message was specifically directed at projects who did not register their corresponding crowdsale with the investments watchdog. The SEC subsequently issued a warning to such projects, which was later implemented by the issuance of subpoenas to non-compliant projects.
Enormous Presale Revenues
On the other hand, the enormous amounts of money raised during the private sales stages could also have influenced the decision to cancel the upcoming crowdfunding event. Reportedly, Telegram held two separate presale events; one in February and the other in March. Despite the relatively low turnout of private investors, the two events raised a total of $850 million each, amounting to the aforementioned total of $1.7 billion. If previous reports that the token sale’s hard cap was $2 billon, then Telegram might have felt that they intended goal was already achieved, hence the termination.
The success of Telegram’s presale event is primarily due to the apps large audience, having over 200 million users worldwide. Consequently, investors had zero doubts over the sustainability of the project. Nonetheless, the messaging platform has been secretive on matters regarding the token sale, even before the reported dissolution of the ICO. Apparently, the company had not yet revealed how it plans to invest the proceeds from the token sale event.