Telegram, the secure messaging app, has canceled the plan to broaden its initial coin offering (ICO), and the public sale has been put on hold. This was the largest ever cryptocurrency fundraising effort that raised roughly $1.7 billion, beating the early projections of $1.2 billion. Telegram wanted to develop a platform that could bring the decentralized internet to life.

The reason for shutting down the public ICO (the process of selling cryptocurrency units ahead of its official launch) is not clear. However, The Wall Street Journal reports that the current regulatory environment was the reason behind this, as the company fears that (in case of public sale) it’ll have to be open to a wider scrutiny from regulators like Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

According to the filings with Securities and Exchange Commission (SEC), Telegram has already raised $1.7 billion from the private sale investors. In the whitepaper, the company aimed at raising $1.2 billion using both private investors (invite-only) and open-sale. However, owing to the greater interest and need, they extended the raise to $1.7 billion before it canceled the public sale altogether.

Some analysts believe that since the company has already raised enough money to fund its project and develop Telegram Open Network (TON); they are good to go without public sale. Conversely, if they raise money from the public it may invite an ICO probe by the SEC and that could create problems for the company and its proposed plan.

Since January, much has changed in the regulatory environment – and things are not as simple as they looked early when Telegram announced ICO. In February, SEC chairman Jay Clayton used some harsh words for ICOs, like: “Many ICOs are being conducted illegally. Their promoters and other participants are not following our security laws,” while testifying before Congress.

In the next month, the SEC sent subpoenas to dozens of cryptocurrency companies, which include some names with an ICO. Regulators and analysts have questioned the credibility of some crypto-ventures as there were massive reports of frauds and deceits.

While Telegram's proposed cryptocurrency has not been labeled as scam or fraudulent, (as endorsed by the research from the Satis Group), the regulators/market will define its status only after its official launch later this year.

As a result of this latest development, ordinary people will not be able to buy Telegram’s Gram crypto token until it is released on crypto-exchanges – and currently, there is no date for that. However, the ICO has attracted a massive crowd as early backers have already started realizing good returns on their investments. According to a TechCrunch report, early investors who acquired a tranche of tokens at a price of $0.37 are actively seeking to sell for $1.30, a roughly 3.5-fold increase – and the token hasn’t gone public yet.

What’s the Project?

Telegram wants to build a blockchain-powered platform that extends its messaging app (roughly 200 million users) into a wide range of services – like payment, file storage, safe browsing, and decentralized apps/services hosted on the platform. The network is named as Telegram Open Network or TON. This network will be built with a public ledger, and would eventually be presented as an alternative to payment methods, like credit cards.