A popular chat app, Telegram, is the latest established company looking to cash in on the cryptocurrency craze by selling digital tokens in a so-called initial coin offering, or ICO.
Telegram is known as a privacy-focused messaging app that helps users thwart surveillance, and was recently in the news due to the government of Iran’s attempts to block protestors from using it.
In a leaked white paper, Telegram described plans to raise a large amount of money by selling a currency called “Gram,” which would serve as a payment companion to its messaging service. As tech news site TechCrunch, which obtained a copy of the paper , reports:
Telegram is understood to be considering raising as much as $500 million in the pre-ICO sale at a potential total token value in the range of $3 billion to $5 billion. …
[CEO Pavel] Durov’s idea is to launch an entirely new blockchain, using the Telegram’s 180 million users as rocket fuel to power forward into mainstream adoption off cryptocurrency and making Telegram, effectively, a kingmaker of other cryptocurrencies, because of its existing scale.
Telegram’s CEO did not respond to requests for comment by TechCrunch, whose report suggests the company sees the ICO as a means to operate as a self-contained banking platform. Specifically, its users could pay for services purely through digital tokens without relying on banks or payment processors, which are often the target of government scrutiny or censorship.
Some on social media were skeptical, however, of some of the report’s loftier claims, including the idea of Telegram becoming a rival to currencies such as Bitcoin:
Some people are seemingly very excited about this potentially becoming the cryptocurrency to end all cryptocurrencies.
But that’s silly. If successful, we’ll have Snap coin. And other shit-company-coins.
This narrative of always making new coins to replace all others is naive. Https://t.co/Tdg4053wVa
— Udi Wertheimer (@udiWertheimer) January 8, 2018
As the tweet notes, the prospect of Telegram becoming a dominant currency will be challenged in part because other companies could easily attempt to do the same with ICOs of their own. Indeed, Telegram wouldn’t even be the first messaging service with its own tokens in the market: the app Kik, which has 15 million active users, raised $35 million in 30 seconds this summer as part of a larger ICO token sale.
Meanwhile, a massive ICO by Telegram could also draw scrutiny from regulators, who have warned that many “tokens” are actually securities that must be registered. Finally, Telegram is regarded with suspicion by some in the security community due to reports its encryption has been compromised by authoritarian governments.