Russian messaging service Telegram raised $850mn in an initial coin offering (ICO), and launched its own cryptocurrency Gram and blockchain platform TON, Vedomosti daily said on March 30 citing the company's report to the Securities and Exchange Commission.

Founded by Russian digital entrepreneur Pavel Durov, who fled Russia and lives in self-imposed political exile in London, this is the second ICO the company has held, and brings the total ICO funding raised to $1.7bn. In this round 94 investors participated in the ICO, despite a recent legal attack on the company by Russia’s Federal Security Service (FSB) that is demanding the digital keys to the service that would allow them to read the otherwise impenetrable messages. Durov has so far refused to comply.

Telegram already went down in history for holding the largest ICO to date, having previously raised $850mn from 81 investors (including Silicon Valley funds Benchmark and Sequoia Capital).

However, the previous offering was reportedly not an ICO in the strictest sense, but more a closed asset placement with payments made in dollars or euros, not cryptocurrency. Investors were in effect purchasing claims on TON's not-yet-launched cryptocurrency, Grams.

The service has been extremely popular, especially with Duma deputies and Iranians thanks to the “uncrackability” of its message service. In March the company reported it had gathered over 200mn users, acquired simply through word of mouth.

Sources in the funds that invested in Telegram told Vedomosti that the demand for both placements was moderate, with $3.8bn worth of bids in the initial offering. Reportedly a third round of fundraising is planned to be held by the end of the year.

The Russian ICO frenzy continued in 2017 with more than 130 ICOs and pre-ICOs conducted by companies with Russian roots, some 10% of the global numbers, according to data collected by ICObench and East-West Digital News (EWDN). 

TON is planned to be launched by October 31, 2019, with investors in both rounds of the Telegram ICO guaranteed their money back otherwise, according to Vedomosti. 

The latest investor presentation claimed that the Telegram messenger will roll out an identification system, Telegram External Secure ID, which will allow the acquisition of the cryptocurrency without additional identification in the future.

On March 27, bne contributor Filip Brokes praised Telegram founder Durov as one of the early Russian digital pioneers in his piece on the flourishing St Petersburg start-up scene for bne IntelliNews.