Telegram, an encrypted messaging app has planned not to hold a public initial coin offering (ICO) to sponsor the development of its “third-generation blockchain.”
Quoting a source acquainted with the matter, the Wall Street Journal noted that the Pavel Durov-led firm confirmed that it is satisfied with the $1.7 billion it has made for the Telegram Open Network (TON) and will likely not to go through the operational and regulatory trouble of creating the offering to the general public.
Telegram has revealed very little about its token sale, with even potential investors complaining about not being able to persuade the firm to provide them with valid details regarding the offering.
However, documents filed with the Securities and Exchange Commission (SEC) disclosed that the firm organized two funding rounds between January and March, and it came up with about $850 million from those endeavors.
Less than 200 investors contributed to the token sale, which was only for institutional investors and wealthy individuals who were screened before being approved to take part in the token sale.
The token sale has been directed under Rule 506(c) of Securities Act Regulation D, which allow firms to sell unregistered securities if they contain the sale to recognized investors, inform the funding round to the SEC, and subject investors to a predefined vesting period.
According to prior reports, it suggests that the firm may have expected to come up with about $5 billion through a private presale and a public ICO. But, one source claims that the regulatory winds have change since it initially started planning the sale.