Connect with us

World

Telegram is holding a secretive second pre-ICO sale

Published

on

You have to admire Pavel Durov’s audacity.

Over the past few months, the CEO of Telegram convinced 81 accredited investors, including Silicon Valley giants Sequoia Capital and Benchmark, to give him $850 million in a presale of his company’s cryptocurrency in advance of an initial coin offering, or ICO. Now he’s trying to raise even more money from accredited investors before the coin gets offered to the public in a secretive second presale.

This week, investors got an email explaining that Telegram is doing another private presale, four sources with knowledge of the deal told The Verge.

The exact amount to be raised is still being determined, according to one source, but two other sources said Telegram is estimating it will be around the same size as the first round, which would bring the total raised to around $1.6 billion before the ICO even opens up to the general public. Telegram’s offering was already the largest ICO ever, dwarfing the previous record of $232 million. Telegram declined to comment on the second presale. Sequoia Capital declined to comment and Benchmark did not respond to questions.

More from The Verge

The new Blu Vivo X has four cameras and costs $249 for a limited time

Tap is the wearable keyboard nobody asked for

Snap responds to the 1.2 million petition signers who hate the redesign

The change in Telegram’s plans comes as the company is under scrutiny for its proposed Telegram Open Network or TON, which promises to be an Ethereum-like ecosystem with apps, services, and a store for digital and physical goods. Critics say the proposal is short on technical details, and that Telegram’s high valuation is being driven by hype and speculation rather than the value of the technology.

How much money is Telegram raising total? Estimates have varied. The company seemed to revise its goals upward as interest in the offering surged. One cryptocurrency and blockchain investor, Carlos Mosquera of Solidus Capital, said the numbers presented by Telegram kept changing; he was offered different versions of the offer from different intermediaries. Discounts on the presale coins ranged from 30 to 80 percent of the expected public price, according to multiple investors who were pitched on the first presale. “A month and a half ago we got the pitch and the opportunity for Telegram,” Mosquera said. “We passed because we received two or three different terms and deals by the same ICO. None of the information was clear.”

Mosquera’s firm was not invited to participate in the second presale, but he said he isn’t surprised to hear that Telegram is looking for more private investor cash. “Nowadays the presales are hotter than the crowd sale itself,” he said.

Related: Secretive messaging app Telegram is selling a $2 billion crypto dream — but skeptics smell a ‘ploy’

It makes sense for Telegram to raise more private money if there is enough demand, multiple investors told The Verge. The first presale was rumored to be oversubscribed, and early investors are reportedly flipping their shares and making 2x returns on the secondary market.

The SEC has also been increasing its oversight of ICOs, which means Telegram may not make its public ICO available in the US,
CNBCreported
. That could be part of the reason why Telegram wants to get more money from accredited investors — meaning firms and individuals with annual income of $200,000 or a net worth of $1 million — because there are fewer regulatory requirements through that process than through an offering to the general public.

Telegram’s public ICO was expected to take place in March.. It’s unclear if the new second private offering affects the timeline for the public sale or how many coins will be available to the public at launch.

Telegram’s ICO is one of the most anticipated the cryptocurrency world has seen, and it’s the first to attract more traditional Silicon Valley venture capital firms. But observers are skeptical of its value offering.

Telegram’s ICO will fund a suite of blockchain-based products including file storage, a DNS service, and an ad exchange as part of the Telegram Open Network or TON, according to the 132-page “technical white paper” circulated to investors. Critics say the proposal makes ambitious claims, such as being able to process millions of transactions per second, without explaining how.

Christian Catalini, a professor and founder of MIT’s Cryptoeconomics Lab, is working on a study of about 1,500 ICOs with his team. “We actually document in our research paper that there has been a major transition from more technical white papers to the kind of white papers that look a lot more like sales pitches,” Catalini told The Verge.“There’s been less focus on technical details over time and, for some of these, much more on selling the vision. In the case of the Telegram one there is a lot that is being promised and not a lot of clarity on how that would be delivered.”

Matthew Green, cryptographer and professor at Johns Hopkins University, had a similar reaction to the white paper. “So to their credit, Telegram has shown that it can execute and get software written. That’s actually a big deal when it comes to blockchain projects,” Green said in an email. “That plus millions of dollars means they could pull something off. But I’ll be honest, the white paper reads like someone went out on the Internet and harvested the most ambitious ideas from a dozen projects and said ‘let’s do all of those but better!’ It feels unachievable, at least at the scale they’re aiming for now.”

Even if the Telegram team had included more technical details, not everyone is convinced it makes sense conceptually. Telegram is effectively proposing to act as a benevolent dictator — it will control a majority of its currency, at least to start — helping a system that will eventually be decentralized get off the ground.

“Blockchains are useful when there’s no central authority in command, or when there’s risk that the owner of the platform might fold,” Emin Gün Sirer, a professor at Cornell, expert on distributed systems, and co-director of the Initiative for Cryptocurrencies and Contracts, said in an email. “Yet Telegram ICO’s appeal stems from its reach to 200 million users, and its central vision over the future of the platform. If the owner folded, there would be little value to what remains. So their adoption of a blockchain, in fact, a whole family of blockchains, seems spurious.”

Others have speculated that Durov is not really raising money for a new blockchain-centric venture, but simply to keep Telegram afloat. Durov was reportedly self-funding the company with his earnings from selling VK.com, the Russian Facebook clone that he founded. “With growing user base, he would’ve eventually run out of money. Therefore he opted for an ICO as a mechanism to raise funds without getting outside investors into Telegram’s shareholder capital,” Gregory Klumov, CEO of the government blockchain company Stasis, told Bloomberg.

Charles Noyes, a quantitative analyst at the cryptocurrency VC firm Pantera Capital, said his team passed on Telegram’s private presale the first time around. (His firm did not get the offer for the second presale.) To him, the secretive Telegram ICO goes against the spirit of blockchain development.

“it’s very important in blockchain technology and specifically cryptocurrencies that you be very open with what you’re trying to do and have as many people as possible looking at it to see if they can find a flaw,” he said. The Bitcoin white paper was first published to a cryptocurrency mailing list, and its pseudonymous author Satoshi Nakamoto requested feedback. Not inviting outside scrutiny is dangerous, Noyes said. “When you operate the way they do, which is closed, with secrecy, not subjecting yourself to peer review, you basically open yourself up to the possibility that there is a trivial bug in it that destroys the network.”

Whether the platform functions well may not matter for early investors. Even with the lockup period that restricts them from selling their tokens right away, investors who bought their coins at a discount could see a significant return after the ICO opens up to the broader public and starts circulating on the TON network. Telegram can also promote its ICO to its users, who numbered 170 million in October 2017 according to one of the presale documents, and its app has become a hub for cryptocurrency chat groups.

“Telegram as a messenger may attract them to Telegram’s new network,” said Alan Woodward, a visiting professor at the University of Surrey, expert in cryptography and information security who has criticized Telegram in the past for using proprietary cryptography instead of commonly-accepted, peer-reviewed cryptography. “Something seems to have worked,” he wrote in an email, “in that they have raised a lot of money already.”

Additional reporting by Casey Newton and Lauren Goode

Source link

World

Crew cupola window view in orbit

Published

on

The first look at the crew in orbit, from left: Jared Isaacman, Hayley Arceneaux, Chris Sembroski, Sian Proctor.

Inspiration4

Inspiration4, which launched with Elon Musk’s SpaceX on Wednesday evening, shared the first photos from day one in orbit and gave an up-close look at the expansive views of Earth from the spacecraft’s “cupola” window.

The crew spent its first day in orbit floating in zero gravity inside the capsule, taking photos from the Crew Dragon window and spoke to patients of St. Jude Children’s Research Hospital, answering questions from space.

The historic private mission — which includes commander Jared Isaacman, pilot Sian Proctor, medical officer Hayley Arceneaux and mission specialist Chris Sembroski — is orbiting the planet at an altitude of 585 kilometers (363.5 miles), which is above the International Space Station and the highest altitude humans have traveled in years.

Inspiration4, which is expected to return to Earth and splash down this weekend, was paid for by Isaacman for an undisclosed amount, with the main goal of the spaceflight to raise $200 million for St. Jude.

Hayley Arceneaux takes in the view of Earth from the Crew Dragon cupola window.

Inspiration4

SpaceX modified the top of Crew Dragon capsule Resilience to add a massive window for the astronauts, replacing the docking hatch that is under the spacecraft’s nose cone with the cupola.

Spacecraft commander Jared Isaacman speaks into a microphone as he peers out the cupola window.

Inspiration4

The cupola is the largest window by surface area ever put in space.

Mission specialist Chris Sembroski is seen taking a photo through the cupola, from an exterior camera on Crew Dragon.

Inspiration4

Isaacman is the third billionaire to fly to space this year, following Sir Richard Branson and Jeff Bezos in July. But the latter two — flying with their respective companies, Virgin Galactic and Blue Origin — spent only a couple of minutes each in space, as those companies’ rockets fly on what are known as suborbital trips. In contrast, Inspiration4 is an orbital mission, with the crew spending multiple days in space and going around the Earth as many as 15 times in day.

Musk, among those who saw them off before launch, tweeted that he spoke to the Inspiration4 crew Thursday and that “all is well.”

“Missions like Inspiration4 help advance spaceflight to enable ultimately anyone to go to orbit & beyond,” Musk wrote in another tweet.

SpaceX CEO Elon Musk poses with the crew before launch on September 15, 2021.

John Kraus / Inspiration4

The Inspiration4 crew is making history in ways beyond becoming the first group of nonprofessional astronauts in orbit: Proctor is the first Black female to pilot a spacecraft, and Arceneaux is the youngest American and first person with a prosthesis to fly in space.

Check out more photos from launch day at NASA’s Kennedy Space Center in Florida:

Medical officer Hayley Arceneaux points to the camera as she and pilot Sian Proctor board the Tesla Model X after suiting up before the launch on September 15, 2021.

John Kraus / Inspiration4

SpaceX’s Falcon 9 rocket lifts off carrying Crew Dragon spacecraft Resilience on September 15, 2021.

John Kraus / Inspiration4

The view inside the Crew Dragon spacecraft about 30 seconds after liftoff as the Falcon 9 rocket accelerated away from Earth on September 15, 2021.

SpaceX

The shimmering exhaust plume of SpaceX’s Falcon 9 rocket launching into the dusk sky above Florida on September 15, 2021.

John Kraus / Inspiration4

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. 
Sign up to start a free trial today.

Source link

Continue Reading

World

Tesla to reverse solar price hike for some customers: legal filing

Published

on

Smith Collection/Gado | Archive Photos | Getty Images

Tesla is trying to placate some solar customers who say they faced sudden price hikes earlier this year, according to new filings with the U.S. district court in San Jose, California.

In a Thursday filing, customers’ attorneys wrote, “Tesla informed counsel for Plaintiffs that Tesla had recently launched a program for customers who signed Solar Roof contracts before the April 2021 price changes to return those customers to their original pricing (if they were subject to a price increase in April 2021).”

As of Friday afternoon, further details of this program were not apparent on Tesla’s solar websites nor the Engage website for customers and advocates of the company. CNBC reached out to plaintiffs’ attorneys and Tesla to get further details about the program. They did not immediately respond.

This spring, frustrated Tesla solar customers sued the company after experiencing surprise price increases.

Filings in three separate lawsuits alleged that Tesla solar customers had already signed contracts with Elon Musk’s electric vehicle and renewable energy venture, and even prepared to have solar photovoltaics installed at their homes, when they were surprised by sudden price hikes that required additional payments to move ahead with their installations.

The price hikes were not trivial. For example, plaintiff Matthew Amans’ solar roof price shot up from around $72,000 per his original contract to around $146,000, according to lawsuit filings.

Those lawsuits were later consolidated into Amans v Tesla, Inc.

Tesla hiked prices for its solar installations at least twice early this year, and made it a requirement for customers ordering solar panels or roof tiles to order the Powerwall home energy storage system as well. Later, CEO Elon Musk revealed that the company would not be able to make enough Powerwalls to keep up with demand this year because of the ongoing microchip shortage.

Overall, solar remains a fairly small part of Tesla’s business. Tesla reported energy generation and storage revenue of $801 million in the second quarter of 2021, with a cost of revenue of $781 million for that division. The company does not break out revenue from solar on its own — the unit includes revenue from its lithium-ion battery energy storage systems, which range from home backup batteries to giant, utility-scale systems.

By way of comparison, Tesla booked $10.2 billion in automotive sales during the quarter.

Here’s the legal filing.

Source link

Continue Reading

World

Elizabeth Holmes pushed faster Theranos Walgreens rollout: Testimony

Published

on

Elizabeth Holmes, CEO of Theranos, attends a panel discussion during the Clinton Global Initiative’s annual meeting in New York, September 29, 2015.

Brendan McDermid | Reuters

SAN JOSE, CALIF. – A former Theranos scientist testified Friday that Elizabeth Holmes pressured her to validate blood test results from the company’s Edison machine to speed up a rollout in Walgreens despite problems with the device’s accuracy.

Surekha Gangakhedkar, a senior scientist at Theranos for eight years who reported directly to Holmes, testified that she returned from a vacation in August 2013 and discovered that Theranos was about to launch its Edison blood-testing devices in Walgreens stores.

“I was very stressed and unhappy and concerned with the way the launch was going” Gangakhedkar said. “I was not comfortable with the plans that they had in place so I made a decision to resign and not continue working there.”

Gangakhedkar recalled meeting with Holmes in September 2013 about the issues that prompted her resignation.

“At that time she mentioned that she has promised to deliver to the customers and didn’t have much of a choice then to go ahead with the launch,” Gangakhedkar said becoming emotional on the stand.

“Ms. Holmes said she didn’t have much of a choice?” asked Robert Leach, an assistant U.S. attorney.

“Yes,” she replied.

Despite signing a non-disclosure agreement, Gangakhedkar said she printed some documents and took them home when she quit because she was “worried about the launch, I was actually scared that if things do not go well I would be blamed.”

Gangakhedkar was granted immunity from criminal charges in exchange for her testimony.

She testified that in August 2013 she didn’t think the Edison 3.0 and 3.5 were ready to be used for patient testing, adding “there were problems with getting consistent results.” However, Gangakhedkar recalled that Holmes was pressuring the team to validate the tests even though “in my opinion she was aware,” of the accuracy issues.

Holmes is fighting 12 charges of wire fraud and conspiracy to commit wire fraud, and has pleaded not guilty. In opening statements, her defense attorney told jurors that Holmes was an ambitious young woman who made mistakes but didn’t commit a crime.

Earlier in the day, Erika Cheung, a former lab associated turned whistleblower, concluded her testimony after three days on the stand. Cheung recalled that frequent quality control failures in the lab created substantial delays in test results for patients.

“We had people sleeping in their cars because it was just taking too long,” Cheung testified. “Every few days we were having to run samples over and over again.”

Cheung, who quit Theranos six months after joining as a college graduate, said she “became concerned probably a month in with the Vitamin D samples.”

Gangakhedkar’s testimony continues on Tuesday. Among the insiders the government plans to call to testify next is Daniel Edlin, a project manager who reported directly to Holmes and worked on the Walgreens partnership. Edlin was also friends with Holmes’ brother, Christian.

Source link

Continue Reading

Trending