Telegram, 2nd biggest ICO in disarray as SEC tightens its grip

//Telegram, 2nd biggest ICO in disarray as SEC tightens its grip

Telegram, 2nd biggest ICO in disarray as SEC tightens its grip

Telegram, SEC

2 min video giving insight to the two year saga around Telegram-

Telegram established 2013 by Pavel Durov issued Grams a Cryptocurrency to be used on a Blockchain-powered platform called Telegram Open Network (TON) who is estimated by Forbes to be worth $2.8 billion and had previously founded  the Russian equivalent of Facebook

Telegram was the second biggest ICO raising $1.7 billion in Q1 2018, Blockone (EOS) is the largest ICO to date, raising $4.2 billion.

As with many unregulated token offers/ICOs it has been almost impossible to assess the real value of Grams. Telegram was mindful of the SEC regulations and their reliance on the Howey test in relation to ICOs, so made it clear that investors were not actually buying equity in Telegram. However, but this did not stop the SEC from taking action in Oct 2018.

A firm called Aton has carried out a review of Gram tokens and estimated the value of Gram at between $2.1 and US$8.0 per token, with the bottom of the range being the value after application of 50% discount rate and 40% share of CUV paid in GRAMS, as well as the top of the range being the implied value after the application of 20% discount rate and 80% share of CUV paid in Grams. The mid-range price is, therefore, $5.1.

In its first fund raising round,Telegram had 81 investors each putting in at least $20 million and raised a total of $850, at an average price of $0.38. In a filing to the Securities and Exchanges Commission (SEC), Telegram reported that it raised an additional $850 million from 94 investors in a second sale, bringing the total amount to $1.7 billion. It also added that it would possibly “pursue one or more subsequent offerings” beyond these first two sales. Investors in the second private round would be able to pay for Gram tokens only in the US dollars and euros at a price of $1.33.

The tokens were due to start trading by 31st, October 2019, if they did not start trading investors were told they would get their money back. This deadline was then extended to 30th, April 2020 now Telegram have offered investors their money back. Meanwhile Gram tokens are trading on the OTC mkt $1.9 earlier this week so why would the initial investors give up potentially $100m profit each?

In another twist that may lead to the demise of Telegram, The Free TON community, an independent group of software developers, validators and users have launched the “Free TON Blockchain” on 7th May 2020 and said Telegram “can no longer be involved” in the project: No surprise the value of Gram tokens on the OTC market has fallen 12% to $1.78.

Is this to be SEC’s biggest scalp crushing Telegram’s $1.7 billion ICO?

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By | 2020-05-09T11:44:28+00:00 May 9th, 2020|Technology|Comments Off on Telegram, 2nd biggest ICO in disarray as SEC tightens its grip