Telegram U.S. snub: death to initial-coin-offering (ICO) fund raising

Strong enforcement action against prominent player could ripple to blunt ICO enthusiasm

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Russia’s Telegram Messenger, popular among cryptocurrency enthusiasts, has hit a snag raising money.

The company, which focuses on privacy, famously raised around $1.7 billion last year by selling its own cryptocurrency in an initial coin offering (ICO). It plans to deliver the coins to investors end of the month.

But now, in the United States, Telegram must stop. The Securities and Exchange Commission (SEC) has obtained a restraining order, saying the coins are unregistered securities.

ICOs have been hot, with companies raising more than $6 billion in 2017 and $7 billion in the first half of 2018 alone.

Now, with such strong enforcement action against such a prominent player, the effect could ripple to blunt some of the enthusiasm.

Already, an observer says the company’s ability to sell the coins in other jurisdictions could be complicated.

News: mixed progress for mainstream crypto investments

Speaking of the SEC, it also rejects a Bitcoin exchange-traded fund (ETF), a sort of mainstream investment instrument. But a different U.S. regulator has opened the gates for a different mainstream instrument, called “futures,” for Ethereum’s Ether, the second biggest cryptocurrency. These mainstream investments potentially attract more institutional money into the sector.

Along with regulator ire, Facebook Libra cryptocurrency now faces attention from copycats. A cryptocurrency group is looking to copy the open-source code to make their own. Called a “fork,” that move has been popular, with Bitcoin copied more than 70 times. Facebook’s Mark Zuckerberg will testify before U.S. lawmakers on Libra on Oct. 23.

Price: possible fall ahead despite last week’s rise

Bitcoin is facing further losses and risks dropping to $8,000, technical analysis suggests. Bitcoin is at $8,372 (C$11,055) as of noon Sunday, Eastern Time, up almost 4 per cent for the week. Bitcoin had risen to a high of $8,800 during the week, the most expensive it had been for two weeks, before pulling back to current levels.

Canada: widow of Quadriga’s Cotten to surrender assets

The widow of Gerald Cotten, the late founder of Vancouver’s QuadrigaCX, has agreed to transfer assets worth about C$12 million to the trustee overseeing the cryptocurrency exchange’s bankruptcy. The couple had been accused of using Quadriga’s funds personally before Cotten’s death triggered the platform’s collapse. The money will be used to repay users, owed more than C$200 million.

About half of Canadian blockchain companies say “legal and regulatory challenges” are impeding their growth, but their people are also among the highest paid, according to a new report commissioned by an industry lobbying group.

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