By Tyler Durden
The reason for the ICO’s popularity, Jason Bloomberg explains, is because Telegram is the preferred means of communication for crypto traders and other members of the crypto community. While it’s not the only secure messaging app, the decision of the Durov brothers to dedicate much of the $300 million fortune they cashed out of VKontakt to maintaining the app as a free service has helped burnish its appeal. The Durovs fled Russia in 2014 after a “fallout” with 
some of their former investors.
And according to the prospectus cited above, as well as public comments made by the brothers, it appears the Durovs see the ICO as a means of raising more funding for their non-profit project – not as a stepping stone toward profitability, which is something they’ve scarcely discussed, according to their public statements.
Ultimately, Bloomberg believes the ICO is essentially another outsize scam.
Founded by Russian entrepreneurs Pavel and Nikolai Durov who cashed out of their social media company VKontakte to the tune of $300 million, Telegram is a secure messaging app that competes with the like of WhatsApp.
‘Compete,’ however, is misleading, because Telegram has no viable business model, as it makes no money – on purpose.
In fact, Pavel Durov covers all its expenses out of his own pocket. “Pavel Durov, who shares our vision, supplied Telegram with a generous donation, so we have quite enough money for the time being,” claims the FAQ on the Telegram web site. “If Telegram runs out, we will introduce non-essential paid options to support the infrastructure and finance developer salaries. But making profits will never be an end-goal for Telegram.”
The ICO, therefore, appears to be a mechanism for Telegram to cover its bills. “With growing user base, he would’ve eventually run out of money,” explains Gregory Klumov, CEO and Founder of STASIS. “Therefore he opted for an ICO as a mechanism to raise funds without getting outside investors into Telegram’s shareholder capital.”
Travis Scher, Vice President of Investments at Digital Currency Group echoes this sentiment. “It really felt like it was one of these start-ups that’s burning through cash and needs a way to bring money in to keep funding their operations,” Scher says. “This is how they decided they’re going to do it.”
Read the entire article at https://www.zerohedge.com/news/2018-02-19/telegrams-2-billion-ico-just-another-scam
