Telegram CEO Pavel Durov and his brother Nikolai Durov have raised $850 million in a private sale for its blockchain platform, “Telegram Open Network” (TON). The enormous sum suggests that TON will prove one of the highest earning ICOs to date.
News of TON’s achievement comes after the Durov brothers filed a “Notice of Exempt Offering of Securities” with the US Securities and Exchange Commission (SEC) on February 13. The document states the money is intended for “the development of the TON blockchain, the development and maintenance of Telegram Messenger, and the other purposes described in the offering materials.” According to the document, TON currently possesses 81 investors. Among the investors are Russian billionaire Roman Abramovich and QIWI founder Sergey Solonin, as told by sources of Russian news publication Vedomosti.
The money raised was part of a pre-sale aimed at venture capitalist firms and other top investors who were informed of the event by private invitation. As part of the pre-ICO, investors were offered significant discounts for Gram, Telegram’s token. Last month, Bloomberg reported Telegram sought to raise $850 million in this private sale, followed by $1.15 million in a public ICO in March. For comparison, the largest amount of money raised by ICOs in the past included Filecoin ($257 million) and Tezos ($232 million).
It is worth noting that Telegram boasts immense popularity in the crypto world, which may have contributed to its pre-ICO success. Not only is the messaging app one of the most prominent ways of obtaining crypto news but it is also a tool that many burgeoning crypto companies use to promote their ICOs. This, coupled with the fact that rumors of a Telegram ICO were circulating since December, may have contributed to the hype and unprecedented demand around Telegram’s token sale. It seems like Telegram is taking advantage of its reputation to position itself as a platform offering an array of services for the crypto community, from micropayments to distributed file storage and more.
While Telegram may have achieved a significant milestone for TON, it has not come without some backlash. An opinion piece published in Forbes suggests the TON ICO “appears to be a mechanism for Telegram to cover its bills” given that the messaging app does not produce any profit. While it may sound strange, the company does this on purpose, with Durov paying for Telegram’s expenses out of his own pocket.
The article also criticizes the “lack of [technical] depth” in Telegram’s white paper, which was leaked back in January. If Telegram’s ambitious goals are not enough to set off red flags, then the lack of explanation as to how everything will be achieved should. There are also doubts about the state of Telegram’s MTProto security protocol. According to the article, a student and developer at SatoshiLabs was able to “poke holes in Telegram’s security approach.” This raises questions about whether or not the level of security provided by Telegram can be trusted.
Despite the criticism, there is no denying that Telegram has been successful in orchestrating one of the largest ICOs in crypto history. While Telegram has not yet developed the technology behind TON, it plans to fully launch services in 2019.
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