Telegram has reportedly called off its much anticipated plans for a cryptocurrency crowd fund. Telegram Group Inc, which runs an encrypted messaging app, has already raised $1.7 billion privately. If executed, the ICO could have been the largest cryptocurrency fundraising the world has ever witnessed. The sudden announcement is a big disappointment to many investors who were eagerly waiting the ICO.

Stringent SEC Measures

Although it is not expressly clear on why the company took this turn, unconfirmed reports have indicated that stringent regulatory measures put in place by the CFTC, SEC and other regulatory bodies caused the sudden and unexpected cancellation.

Since Telegram unveiled plans for the crowd sale, several agencies have stepped up efforts to implement rules and regulations that govern ICOs and the entire digital currency sector. Telegram may have decided to call off the crowdsale so as to avoid being in the spotlight.

Since the start of this year, there have been several changes on the rule that govern ICOs. Jay Clayton, the chairman of SEC recently indicated that several ICOs were being executed illegally. The touch message was meant for several projects which did not register their ICOs with SEC.

No need for more funding

According to Spencer Bogart, a managing partner at Blockchain Capital, Telegram could have seen a lot of risks in a public sale and hence opted to have a private sale. He adds that because the company had raised enough money through a private sale, it didn’t see the need to take more risks in a public sale.

Telegram is reported to have held two presale events in February and March. The company managed to raise $850 million from each even despite a low turnout by investors. If reports that the token sale’s cap was $2 billion then the company might have reached its target hence did not see the need for a public sale.

The company’s large apps audience was a driving force behind the success of its presale events. Telegram has more than 200 million users globally. This alone made investors to see a lot of sense in the project.