Messaging App Telegram Cancels Plans for Public ICO

Popular cloud-based mobile/desktop instant messaging app Telegram has decided to cancel its plans for a public initial coin offering (ICO), according to a report in the Wall Street Journal (WSJ). It is, perhaps, not too surprising since Telegram had already managed to raise around $1.7 billion this year from fewer than 200 private investors.

Telegram was founded in 2013 by Russian entrepreneur Pavel Durov, the founder of Russian social network VK, and his brother Nikolai. It had managed to gather much excitement and hype for its Telegram Open Network (TON) project, an online services platform that will be built using blockchain technology. There will also be a token, called "gram", that will act as the virtual currency on this platform. According to an article in The Verge, the idea is for TON to be an "Ethereum-like ecosystem with apps, services, and a store for digital and physical goods." Telegram is counting on its 200 million users to make this cryptocurrency achieve much wider mainstrem adoption than exisiting cryptocurrencies such as Bitcoin and Ether.

The WSJ report goes on to say that according to a two-page doucument that was circulated last year, Telegram was planning to raise about $1.2 billion split 50-50 between private and public investors, with the public round of fundraising to take place in March 2018. However, in February 2018, Telegram reported to the U.S. Securities and Exchange Commission (SEC) that it had raised $850 million from 81 private investors; and then in March, the SEC was told that Telegram had raised an additional $850 million from a group of 94 private investors. These two private placements had only involved accredited investors, i.e. persons with an annual income of at least $200,000, or a net worth of at least $1 million.

Another source told the WSJ that another reason for Telegram's change of mind about doing a public ICO was that the regulatory climate had changed since it made its plans for a public ICO last year. This is understandable given the view of the SEC Chairman, Jay Clayton, towards ICOs. On 6 February 2018, at a U.S. Senate hearing, he said: "I believe every ICO I've seen is a security." 

Mike Novogratz: Bitcoin 'Was Always a Confidence Game'

Siamak Masnavi

On Friday (March 13), Michael Novogratz, a former Goldman Sachs partner, as well as Founder, Chairman, and CEO of crypto-focused merchant bank Galaxy Digital, gave his latest thoughts on crypto.

Novogratz's comments on Bitcoin (and crypto in general) were delivered on Twitter on Friday (March 13) at 1:37 UTC, which is roughly 37 minutes after the Bitcoin price hit $4,240, the lowest price it had been since 2 April 2019.

BTC-USD 12 Month Chart on 15 March 2020.png

Here was Novogratz's tweet:

This tweet is a little confusing since Novogratz has been saying for quite a while now that Bitcoin is going to become "digital gold."

For example, this is what he said about Bitcoin back in February 2019 in an interview with Bloomberg Television:

"We are not gonna bubble back up... We are going to grind back up...

"In the next run-up, you're really going to separate Bitcoin from a lot of the other cryptocurrencies... I think if there is 118 elements on the periodic table, only, gold, is valuable just because it's a store of value... Bitcoin is going to be digital gold.

"There's going to be a place where you have soveriegn money. It's not U.S. money. It's not Chinese money. It's sovereign. And so, sovereignty costs a lot. It should cost a lot."

This tweet almost makes it look like he has lost all of his confidence in Bitcoin, but if this is the case, how could this have happened so quickly to such an experienced trader since at the beginning of this month he was explaining to people on Twitter explain why Bitcoin has been trading recently like a risk asset:

As for the answer to Novogratz's question on Twitter about what is going to bring confidence back to Bitcoin, perhaps, the most popular answer came from Lightning Network advocate/developer Pierre Rochard: