If Telegram's ambitious blockchain project fails, investors can't say they weren't warned.
Along with the white paper and technical documents, prospective buyers in what could be one of the largest-ever initial coin offerings (ICOs) have received a nine-page memorandum spelling out the risks of buying the tokens. For investors in traditional markets, such a litany of dangers is a familiar sight - the documents list almost every conceivable thing that could go wrong.
But the Telegram document, a copy of which was obtained by CoinDesk, is striking because the company isn't offering equity. Instead, the tokens would be used for payments between users and to access various services on the proposed Telegram Open Network, once it is built.
The document may have been written out of an abundance of caution, considering the size of Telegram's initial coin offering (ICO) - potentially $2.5 billion.
As such, CoinDesk has outlined some of the most salient hazards listed in the document, which has the lawyerly title "Certain Risks Associated with the Purchase, Sale and Use of Grams."
A government could impose liquidity requirements on Telegram or find that grams are a regulated equity, requiring registration, the document warns. If regulation in one place became too onerous, Telegram might exit the country or even shut the project down, it says.
On the other hand, Viktor Mangazeev, CEO of blockchain fantasy sports platform MyDFS, says Telegram may have a regulatory edge over rival messaging platforms that makes it uniquely suited to do a fundraiser like this.
There's a few messaging apps that are larger than Telegram, but the leaders, Facebook Messenger and WhatsApp, are based in the U.S., which has been hesitant about cryptocurrency. WeChat is another dominant platform, but its home, China, has recently turned hostile to crypto.
Of the popular messengers outside those two countries, "Telegram is the most technologically promising of them," Mangazeev contended.
