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The announcement of the initial coin offering (ICO) of the Dubai-based encrypted messaging application Telegram created a stir in the market. The team, led by Pavel Durov, aims to raise a couple of billion with the blockchain-based fundraising technique, and has already gathered investments worth $850 million from a closed-door presale of tokens.

However, the biggest ever ICO has attracted quite a bit of controversy. Recently, it appeared in the headlines again because it negated its precious promise of a full refund to investors if the TON platform fails to launch by October 2019 in a document that it released its investors.

The messaging platform is expecting to raise $1.7 billion in the second stage of the token sale. With this, Telegram is aiming to raise $2.55 billion via ICO, dwarfing the previous biggest ICO event held by Tezos, which raised $232 million.

In the document, the firm clearly mentioned that it will provide a full refund to the investors if the blockchain-based platform is not launched by October 2019. However, in a separate statement, it noted that there is no guarantee that it would have the money to do so.

The statement noted: “There can be no assurance that the Issuer or Telegram will have sufficient funds to make payments of any Termination Amount (as defined in the Purchase Agreements) as and when required under the terms of the Purchase Agreements. Neither Telegram nor the Issuer has any fiduciary or other obligation to use the funds generated by the token sale for the benefit of the purchasers…”

Attracting Silicon Valley investors

The hyped ICO of Telegram is attracting some of the biggest Silicon Valley investors towards the unregulated ICO market. According to the Financial Times, three venture capital firms – Kleiner Perkins Caufield & Byers, Benchmark, and Sequoia Capital – have shown interest in investing $20 million in Telegram’s blockchain-based project. This is a huge move on the part of traditional venture capitalists, as unlike the traditional market, the unregulated ICO market does not provide any kind of security to the investors.

The already active user base of Telegram provides massive leverage to the platform in launching a blockchain-based product. However, some cryptocurrency investors are keeping their distance from the Telegram ICO because of the high valuation of the token sale and its lock-up period.

Mentioning the recent confusion with the refund, Joe DiPasquale of BitBull Capital told Business Insider: “If they can raise $2 billion then it’s almost a guarantee the token will launch.”

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