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Abu Dhabi, UAEWednesday 20 June 2018

WhatsApp rival Telegram raises $1.7 billion in coin offer

The app popular among users in Russia and Iran looks to create its own cryptocurrency

Silhouettes of mobile users are seen next to a screen projection of Telegram logo. The messaging app founded in Russia is popular for its user-friendly features and higher encryption protection. REUTERS/Dado Ruvic/Illustration
Silhouettes of mobile users are seen next to a screen projection of Telegram logo. The messaging app founded in Russia is popular for its user-friendly features and higher encryption protection. REUTERS/Dado Ruvic/Illustration

Telegram Group, an encrypted messaging app seeking to create its own cryptocurrency, has increased the proceeds from the world’s largest initial offering to $1.7 billion, according to a regulatory filing.

Telegram raised $850 million from 94 investors in March in addition to $850 million it gained in February, and “may pursue one or more subsequent offerings,” the British Virgin Islands-registered firm said in a filing to the US Securities and Exchange Commission on Thursday.

“Raising the planned amount is a success for Telegram, given that the Bitcoin decline in recent weeks made investors more cautious toward crypto-assets," said Gennady Zhilyaev, a former executive of Templeton Emerging Markets Group in Russia, who now invests in virtual currencies and initial coin offerings.

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The company, founded by self-exiled Russian Pavel Durov, plans to use the ICO proceeds to develop the Telegram Open Network blockchain, which includes the cryptocurrency Gram. It aims to enable transaction speeds faster than the Bitcoin and Ethereum blockchains and may seek to compete with Visa and Mastercard, according to Telegram documents.

Interest in the Telegram ICO has recently helped the company surpass the threshold of 200 million monthly active users, “with over 700,000 new users signing up each day.” Telegram admitted it had connection failures in Europe and the former Soviet Union Thursday, blaming the interruptions on its data centre provider.

In Russia, Telegram is under threat of being blocked after it refused to provide encryption keys to the Federal Security Service to comply with legislation on fighting terrorism.