This week in crypto, Telegram pledges to return over $1 billion to investors; Andreessen Horowitz raises $515 million; and Roger Ver gives up on flattening the curve. All in a week in crypto, eh!
Telegram promises to return money to investors
According to a letter to investors, the messenger app Telegram will return investors’ money amid delays to the launch of its upcoming blockchain network, the Telegram Open Network.
Specifically, Telegram promises to return up to 72% of each investors’ stake from the $1.7 billion 2018 token sale for the platform’s native currency, Grams. Telegram is also offering investors “an alternative option to receive 110% of your original investment by April 30, 2021, which is 53% higher than the Termination Amount.”
TON’s launch has been deadlocked since October 2019 by a court case with the SEC. The SEC alleges that Telegram’s token sale was an unregistered securities sale, and thus illegal. Telegram disputes this: because the token sale operated through something called a SAFT, investors were simply buying the rights to receive Grams at a later date. This was supposed to circumvent securities laws.
The SEC isn’t convinced, and, apparently, neither is the court. Judge P. Kevin Castel, of the New York Southern District Court, wrote in a letter last month that the SEC “has shown a substantial likelihood of success in proving that Telegram’s present plan to distribute Grams is an offering of securities.” Castel has upheld temporary injunctions against TON’s launch.
But Telegram is charging on. It reportedly told investors that it is “continuing to engage in discussions with the relevant authorities” and that investors could be entitled to “Grams or potentially another cryptocurrency on the same terms as those in their original Purchase Agreements.”
But for how much longer? TON was created to monetize Telegram, the 400 million-strong messenger app. Currently, Telegram doesn’t run advertisements and relies on the cash of its billionaire founders, Pavel and Nikolai Durov, who made their money setting up the Russian version of Facebook, VKontakte.
Without TON, that money is running out. Without a sustainable business model, how long can the privacy-first messaging app stay afloat?
Andreessen Horowitz raises $515 million for crypto fund
Silicon Valley venture firm Andreessen Horowitz on Thursday announced that it had raised $515 million for a blockchain and crypto venture capital fund. The money will be used to debut several new blockchains.
“It’s very rare that major, new computing paradigms come along, and we think this is on the scale of cloud and mobile for the Internet,” Chris Dixon, the Andreessen Horowitz partner who’s co-managing the crypto fund along with colleague Katie Haun, told Fortune.
The pair wrote in a blog post that they’re “excited” about a raft of different crypto projects, such as payments systems, digital stores of value, decentralized finance, Web3, and new ways for creators to make money.
“We think it’s important to keep investing in the long-term development of the internet to address the needs of the coming decades.”
They added, “In the same way that it wasn’t obvious in 2007 how applications on top of mobile phones would change so many aspects of the ways in which we move, consume, travel, communicate, and even date, it’s hard to imagine what the very best apps and use cases will be for blockchain-based computing platforms.”
The firm’s first crypto-fund raised $300 million. Among companies it invested in are decentralized stablecoin producer MakerDAO, lending protocol Compound and crypto exchange Coinbase. The firm also helped Ethereum competitor DFinity raise $163 million in two funding rounds.
Bitcoin Jesus wants to end the coronavirus lockdown
Roger Ver—‘Bitcoin Jesus,’ Bitcoin investor, owner of Bitcoin.com, and er, Bitcoin Cash promoter—is sick of (but not because of) the lockdown.
“The lockdown is a disaster,” Ver told Decrypt. “It is one of the worst things to happen to the US in a long long time. Arguably worse than 9-11.”
Forcing people to stay inside to flatten the curve is “both morally and legally wrong,” according to the staunch libertarian.
Ver’s own company, Bitcoin.com, has laid off 10% of its staff in the past 12 months, he said in April. The cuts follow a drop in the price of Bitcoin Cash, which fell 71% in March. Ver declared that Bitcoin.com has become “a leaner more guerrilla team.”
At Virtual Blockchain Week, Ver doubled down on his perceived attack against free will. “With coronavirus, they are literally telling people at what price they can or can’t sell their toilet paper for,” said Ver during the conference. With Bitcoin, you can sell toilet paper for as much as you like while avoiding the purview of the government.
“Anybody who studies economics knows that any time you have price control, that leads to shortages. You need to have the prices transmit the information as to what people want and what people don’t want, and if you block those prices that need to change, you block that information to the economy.”
Ver is from California, one of the US states hit hardest by the coronavirus pandemic.