SINGAPORE (Jan 22): Messaging service app maker Telegram is reportedly launching the biggest initial coin offering (ICO) in history, with plans to raise up to US$1.2 billion ($1.6 billion). The end-to-end encrypted messaging app that was once labelled the app of choice by terrorists is raising US$600 million in a private sale of tokens that ends next month. It will raise another US$600 million in a public token sale starting in March.

Investors in the ICO will get a contract that gives them the right to Telegram’s tokens once they are listed on cryptocurrency exchanges. Called Gram, the tokens are expected to list in January 2019. Investors in the private sale cannot sell the digital currency for a period for 18 months. Private sales investors are likely to get a discount of more than 50% off the initial price in the public sales. The public sale price is expected to be 97 US cents per token, and the discounted tokens in the private sales could be as little as 31 US cents. Telegram says investors will eventually be able to use Gram to buy and sell services over a blockchain-based network it is planning.

An ICO, so named for its resemblance to an IPO, has become an easy way for start-ups to raise funds. Instead of pitching to venture capitalists and private-equity firms, or going through a stringent IPO process, start-ups merely engage an ICO specialist and issue digital currency to any buyer. The tokens, or coins, from these ICOs may have various stated purposes. Although, according to a report by Token Report, only one in 10 tokens is used as originally intended.

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