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News Bytes for May 3, 2018

Use our news to inform cryptocurrency trading decisions, stay up-to-date on happenings in the industry, and more!

Crypto Exchange BitGrail Legally Forced to Shut Down Just Three Hours After it Opens

Yesterday BitGrail Tweeted “BitGrail is pleased to announce the re-open of our exchange!” only to announce three hours later that “We have temporarily disabled the BitGrail exchange pending further notice.” Users quickly became irritable, some pondering if they were “getting robbed”. BitGrail quickly responded with a post to their web site that they were “notified of a deed by the court of Florence requesting the immediate closure of BitGrail and this situation will persist until a decision is made by the courts…”

SEC Mulls Whether Ethereum is a Security Under US Law

US regulators are cracking down on non-compliant securities issuers, and senior officials are set to meet to discuss whether that group includes the founders of Ethereum.

Telegram Scraps Public ICO as SEC Cracks Down on Token Sales

The company behind wildly-popular encrypted messaging app Telegram has scrapped plans to open its initial coin offering (ICO) to the public, says an anonymous source close to the matter.

Goldman Sachs To Open Bitcoin Trading Desk

Goldman Sachs, hiring their first cryptocurrency trader, becomes the first major Wall Street bank to open a bitcoin trading desk. Trading will start in the next few weeks, accordingly to a New York Times report.

Reddit Likely to Bring Back Bitcoin Payments, Add Ethereum and Litecoin Support

Cryptocurrency payments will likely be returning to popular social media platform Reddit, a company executive said on Wednesday.

telegram ico

The company behind wildly-popular encrypted messaging app Telegram has scrapped plans to open its initial coin offering (ICO) to the public, says an anonymous source close to the matter.

According to the Wall Street Journal, Telegram — which is developing a blockchain ecosystem called the Telegram Open Network (TON) — has determined that it does not want to enter the murky regulatory waters currently governing the ICO industry.

That’s not to say the company is hard up for cash.

As BlockExplorer reported, the chat platform already reported to the Securities and Exchange Commission (SEC) that it had raised $1.7 billion from fewer than 200 investors during two private ICO presales, which the firm conducted during the first three months of the year.

Those funds will purportedly be used to develop TON, which the company has privately described as a “third-generation blockchain” capable of processing millions of transactions per second. However, skeptics have wondered aloud whether that money will instead be used to fund Telegram’s general operations, as the app does not currently generate revenue.

One anonymous source cited in the report connected Telegram’s decision to shelve the public ICO to the SEC’s increasing oversight of the burgeoning ICO space, which has seen startups collectively raise billions of dollars over the past calendar year — and fraudsters make off with a noticeable percentage of it.

Since the presale excluded retail investors, Telegram was able to claim an exemption from traditional securities registration requirements.

However, opening the offering to the public would raise a number of thorny regulatory issues, and many observers believe the SEC is preparing to bring down the hammer on noncompliant ICO operators.

If a company as well-known as Telegram conducted a conventional ICO, it would present the SEC with a high-profile target if it desired to make an example intended to frighten other market participants into compliance.

Featured Image from Pixabay

Say what you like about the Telegram ICO, but you can’t fault it for a lack of ambition.

The secretive initial coin offering (ICO) — sponsored by the encrypted messaging app and its founder, Russian entrepreneur Pavel Durov — is reportedly aiming to raise more than $2 billion to bootstrap the development of its “third-generation blockchain,” known as the Telegram Open Network (TON). And that figure, it’s important to note, only refers to the presale.

Telegram has been infamously opaque about the token sale — and the details of the TON — and even prospective investors have complained that the company has refused to give specifics about the fundraising round.

Nevertheless, the company does not seem to be having trouble finding investors will to plunk down millions of dollars to contribute to what will almost assuredly be a record-setting ICO. A document filed with the SEC this week indicated that the first round of the Telegram ICO — which began in late January — raised $850 million from 81 investors.

This document, incidentally, was filed the same day that Kaspersky Lab revealed that Russian hackers had exploited a security flaw in the Telegram desktop application to deceive users into downloading cryptocurrency mining malware.

Following this successful funding round — which dwarfed the firm’s earlier-reported target of $500 million — Quartz reports that Durov believes the Telegram ICO can raise another $1.15 billion from presale contributors.

“The combination of the scale and quality of the demand has led us to rethink our strategy for both this transaction and the next round,” the publication reports John Hyman, Telegram’s chief investment adviser, as stating in offering documents distributed this week.

However, in keeping with the shifting goalposts that have accompanied the Telegram ICO since it was first announced, freelance journalist Adrianne Jeffries reports that a source has told her that Telegram is “planning to ditch the public sale entirely” and add two more presale rounds targeting $850 million and $300 million, respectively.

“Durov likes the sense of power over investors and the fact that he forces them to play by his rules,” she cites the source as saying.

Featured Image from Pexels