[Ko Ran] ICO, commercialize fraud (Part two)
[Ko ran] After Telegram announced it will discontinue its blockchain project, Telegram Open Network, or TON, there is growing curiosity over whether investors will receive refunds, and if so, how. Telegram has yet to confirm any details. We might have a glimpse into the future of investors of Telegram looking at other networks that were ordered by the U.S. Securities and Exchange Commission (SEC) to return investments when faced with the same accusations as Telegram: issuance of unregistered securities. In a nutshell, it may not be easy for investors to get their money back. #The situation might be different for token holders who purchased in groups According to a report by Coindesk Korea, investments by locals into Telegram’s Gram amounts to tens of billions of won. The messenger app did not source funds through an Initial Coin Offering (ICO). It raised investments through private sales for a small number of investors. And they are some interesting figures. According to documents revealed during a legal battle with the SEC, some of the investors named on the list were, Roman Abramovich, a Russian conglomerate and Mikhail Abizov, a former minister of government in Dmitry Medvedev's administration. Industry analysts speculate sales participation amounts to be at least a billion won. The investments made in Korea seem to be a drop in the bucket, so how could we possibly suffer from damage? Local investors did not directly purchase the Grams from Telegram, but purchased in groups through a consigned vendor named “Gram Asia.” Its official home page has been shut down, and the company is nowhere to be found. We do not know yet exactly how much and to what extent Telegram is willing to pay. Considering what happened with investors of AirToken, group purchasers are likely to be at the bottom of the list for Telegram. AirToken wrote in an email to its investors in 2018, it will “offer a chance for a recession at USD ICO price” to a “sub-set of token holders who bought directly” from the company during the ICO. #Rani’s note: The only one to protect in the world of cryptocurrency is oneself. The reason why ICOs were deemed innovative was that they offered individual investors a chance to make initial investments through cryptocurrency, which is usually reserved to a small number of capital holders. Like our political system, it seemed to promise a democracy in investment through cryptocurrency. However, the results seemed to head in the opposite direction. Many scam projects have abused the ICO system to target investors who do not have a clear sense of investment. What was seem as democratizing investment turned out to commercialize fraudulent activities. While the ultimate goal of cryptocurrencies is “decentralization” in order to protect investors, it is much more effective to centralize. The only way to protect yourself from the decentralized cryptocurrency scene is to focus on oneself and be smarter. That is the cruel truth. Join D will be on your side along the journey.