Telegram’s USD 1 billion ICO - Myth or Reality

One of the leading instant messaging service providers, Telegram, has been surrounded during the last few months by various rumors and not much in terms of facts and official announcements, pointing to an upcoming initial coin offering (ICO).

by Coins.Online
14 March • 4 min
In News

And while speculation and rumors are inherent in an industry as fast-paced as the crypto, they add all the more excitement when circling a successful venture with over 180 million active users globally, increasing at a rate of 500,000 per day.

Numerous cryptocurrency media and influencers hopped on board, speculating on details about the supposed issuance of digital coins, although Telegram officials haven’t ever announced firmly a public capital-raising venture in their plans. But anyone following the crypto sphere closely is aware of the many reports, which lead to believe Telegram’s ICO will take place at some point in 2018 and will be the biggest ever, passing the USD 1 billion mark and overshadowing both Tezos and Bancor, which raised less than USD 400 million together.

So how did the crypto world end up anticipating the biggest ICO ever with so few concrete details and announcements made? The simple answer is by information scarcity, rumors and speculation, so let’s look at how the build-up was created in time.

It pretty much all started in the closing days of 2017, when Telegram CEO Pavel Durov told Bloomberg “something big” is in the plans. And in the year when coin offerings raised almost USD 2 billion, what other could be defined as “big” than an ICO by a huge and highly perspective organization – that’s the logical conclusion much of the community came to.

Next month, January 2018, shed more light as potential investors told specialized crypto media CoinDesk that Telegram is considering an ICO of some sort. This excited the community and for a good reason – Telegram wasn’t some ambitious start-up project, but rather a functioning, growing business, where Blockchain technology made huge sense for payment encryption and processing across an already existing user base of over 180 million. The vast potential of this venture understandably roused industry followers and the first rumors of a USD 500 million funding target started emerging. No official statements from Telegram followed, but reputable media TechCrunch quoted sources, who shared Telegram is about to build its own Blockchain network TON (Telegram Open Network), supported by a proprietary cryptocurrency, whose units would be named “grams”.

More rumors followed as insiders spoke to CoinDesk, hinting at a USD 600 million target for a pre-sale to a large private investor, followed by another USD 600 million target for a main coin offering event, open to the public – the billion-dollar ICO (rumor) was born.

Telegram would create 500 billion ‘Grams’ on a third-generation Blockchain network to improve on Bitcoin and Ethereum, CoinDesk reported, but the economics of the supposed upcoming new crypto sparked even further excitement. Each gram would start at a given price, but its value would increase with each subsequent token sold – this would translate to over USD 14 billion raised by TON over its lifetime, CoinDesk stated.

As February came, some more Telegram-related drama unfolded. CEO Durov remained as tight-lipped as ever, with the only official announcement issued disproving rumors about the ICO taking place, as scammers and fake websites claimed the company’s Gram crypto token was up for sale through them.

This was followed by reports from Quartz of investors selling their Grams for double the amount they had bought for, which again was interesting as the tokens were to be sold with substantial vesting periods.

The first official news, backed by an actual document (and the only until now) came a few days later when Techcrunch obtained Telegram’s Form D – the official document submitted to the US Securities and Exchange Commission (SEC) used for filing notification for an exempt offering of securities. It showed Telegram had raised USD 850 million “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes”. Make of that what you will - it is the only real evidence of the Telegram ICO parameters.

Last, but not least, Telegram has also proposed a form of refund, should the supposed ICO fail to reach its goals, albeit vaguely.

So, with all that said, not much changes, as the company’s anticipated coin offering still has the potential to be the biggest one ever. Latest media reports also cite an updated crowdsale estimation of over USD 2.5 billion. Only time will tell, as they say, but one thing has become clear – speculative rumors have surely been beneficial to Telegram’s supposed ICO, as it continues to be the one to watch for.