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Telegram Cancels Its Public ICO To Avoid SEC’s Regulatory Inconveniences

On May 2, it was announced that the Telegram team has decided not to commence its public Initial Coin Offer (ICO) after gaining about $1.7 billion in its 2 private pre-sales fundraisings.

The news was released by The Wall Street Journal which cited a source linked to the ICO. According to the sources, after raising enough funds in the two private presales, Telegram’s administrators canceled the release of its public sales, in addition to the changes in the regulations of the public initial coin offering.

In these terms, you should note the reply of Erik Voorhees, CEO of ShapeShift, who criticized the effects of the SEC regulations on the cryptocurrency ecosystem, as it left small crypto investor in disadvantage.

The SEC has created an environment where only the rich (aka “accredited investors”) are able to get access to finance deals. The plebeians must stick to the lottery.

Erik Voorhees, CEO de ShapeShift

Telegram wants to avoid the recent regulatory inconveniences around the ICO

Despite that the tokens released via ICOs do not commonly represent shareholdings for the businesses which handle such projects, the SEC has still classified some of these crypto-related approaches as securities.

The Telegram ICO was designed to raise funds dedicated for the future release of the company’s own blockchain network, dubbed as TON (Telegram Open Network), which was announced as the Ethereum’s competitor and which was supposed to release the Telegram’s own cryptocurrency, GRAM.

From January to March 2018, Telegram managed 2 private presales of its ICO, in which it gained $1.7 billion, $850 million for each, from 175 private investors, a fact that made this ICO the one with highest collection rate, so far.

The Telegram private ICO was running under the Rule 506 of the Securities and Exchange Commission’s (SEC) Securities Regulation Act D, which stipulates that a business may manage and run a sale of securities not registered within the SEC, only if it keeps the sale for the accredited investors, send fundraisings reports back to the SEC, and investors are subject to a defined consolidation period.

Anna Galvez

Bithumb Cryptocurrencies Exchange Plans On Launching Its Own ICO And Crypto Coin

South Korea’s renowned exchange house, the Bithumb cryptocurrencies exchange, is planning to launch an ICO and to issue its own crypto coin.

According to local reports, Bithumb initial currency offer, or ICO, would take place in Singapore in view of the fact that this fund-raising scheme for blockchain projects is banned in South Korea. So far, Bithumb has not confirmed the information, but it is given as true by TokenPost, which means that meetings have been held with investors and institutions.

“We know that the BitHumb crypto coin is routed through a local subsidiary acquired, at its turn, by a subsidiary of Bithumb. Details such as the date of issue and the amounts of cryptocurrencies have not yet been confirmed,” a spokesman for the exchange office was quoted as saying.

Bithumb follows the strategies already implemented by Huobi and Binance

Thus, Bithumb follows in the footsteps of the Huobi exchange house, which recently announced its plans to issue 500 million tokens based on blockchain technology, though not through an ICO, but would only be allowed to obtain it from those already registered in the exchange, this perhaps because of China’s strong cryptocurrencies regulations in that regard.

Another example is the Binance exchange house, which already has its own cryptocurrency, the Binance Coin (BNB), which allows its users to trade with other cryptocurrencies at low operating costs, in addition to the exchange house burning some chips to increase their shortage and encourage the increase in their value.

South Korea banned the ICOs during the past year, due to some cases scams and investment frauds that were hidden under this fund-raising scheme, something that certainly does not please the authorities. This has led some businessmen and academics to pronounce themselves in favor of fewer prohibitions and more support for blockchain.

However, Bithumb, the renowned South Korean cryptocurrencies exchange, will launch its own crypto coin and will hold an ICO in Singapore, to evade the cryptocurrencies regulations from South Korea.

Anna Galvez