After bringing in $1.7 billion from private investors, messaging app Telegram has called off its public initial coin offering (ICO).
According to The Wall Street Journal, Telegram raised the money by selling newly created cryptocurrency to fewer than 200 private investors. The company will use the funds for a project, Telegram Open Network, which will expand its technology and further redevelop its messenger service, which has about 200 million users globally.
Started by brothers Pavel Durov and Nikolai Durov, Telegram offers users an encrypted platform that is free from government surveillance. While some have praised it for its privacy, others have raised concerns, alleging it is the preferred communications platform for terrorists, militants and criminals.
The new network will be built using “blockchain” ledger technology, and “can become a Visa/Mastercard alternative for a new decentralized economy,” according to a 23-page report by the company.
The fundraising effort, which took place from January to March, has made Telegram one of the largest initial coin offerings, despite the change in plans to offer both a private and public round of fundraising.
Late last year, Telegram reportedly wanted to raise about $1.2 billion, split evenly between a private and public ICO. It was expected that the public sale would happen in March 2018.
However, Telegram reported in a February Securities and Exchange Commission (SEC) filing that it raised $850 million from 81 investors in a private deal. And in March, the company revealed that it had raised another $850 million from 94 investors in a second private deal.
The offerings were open only to accredited investors, so participants needed to exceed income requirements or have a net worth of at least $1 million.
Telegram’s latest filing on March 29 suggested that fundraising could be ongoing. However, a source said the company is no longer open to a public deal.
Telegram hasn’t commented publicly on its offering.